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BUSINESS
December 13, 2011 | Reuters
Morgan Stanley agreed to give up insurance claims against MBIA Inc. in exchange for a $1.1-billion payment from the ailing insurer, ending a two-year legal fight over guarantees on mortgage bonds. The deal, announced Tuesday, is the latest move by Morgan Stanley Chief Executive James Gorman to clear away vestiges of the financial crisis and put the Wall Street bank on a more stable path. The settlement will cause Morgan Stanley to take a $1.2-billion charge in the fourth quarter after accounting for a tax benefit, but it will also remove risky assets from the company's balance sheet that have led to big swings in its quarterly earnings the past four years.
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BUSINESS
December 13, 2011 | Reuters
Morgan Stanley agreed to give up insurance claims against MBIA Inc. in exchange for a $1.1-billion payment from the ailing insurer, ending a two-year legal fight over guarantees on mortgage bonds. The deal, announced Tuesday, is the latest move by Morgan Stanley Chief Executive James Gorman to clear away vestiges of the financial crisis and put the Wall Street bank on a more stable path. The settlement will cause Morgan Stanley to take a $1.2-billion charge in the fourth quarter after accounting for a tax benefit, but it will also remove risky assets from the company's balance sheet that have led to big swings in its quarterly earnings the past four years.
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BUSINESS
December 20, 2007 | From Times Wire Services
Billions of dollars of municipal bonds insured by ACA Financial Guaranty Corp. were cut to "junk" status Wednesday after Standard & Poor's downgraded the insurer itself because of its exposure to losses on mortgage-backed debt. S&P slashed its rating on ACA Financial to CCC from A, which already was the lowest rating among bond insurers. S&P said ACA's capital cushion of $650 million was $2.2 billion short of what it needed to cover potential losses.
BUSINESS
November 1, 2010 | Reuters
Ambac Financial Group Inc., which was the second-largest U.S. bond insurer before suffering huge losses on risky mortgages, said it may file for bankruptcy protection as soon as this year after skipping a bond interest payment. The announcement is the latest setback for Ambac, which has struggled to stay solvent after the housing market collapse. Ambac had pursued higher profit by expanding beyond municipal bond insurance and starting to insure riskier debt. That move backfired as credit tightened and more borrowers defaulted.
BUSINESS
January 12, 2008 | From Times Wire Services
MBIA Inc., the largest bond insurer, was sued by shareholders over claims that the company hid its potential losses from securities backed by mortgages. The suit alleges that Chief Executive Gary C. Dunton and Chief Financial Officer Charles Edward Chaplin violated federal securities laws by issuing false financial statements, regulatory filings and statements during investor calls. The company reported fourth-quarter write-downs and expenses this month of about $4 billion related to mortgage securities.
BUSINESS
February 1, 2008 | From the Associated Press
MBIA Inc. reported a $2.3-billion fourth-quarter loss Thursday, but the bond insurer's executives defiantly told investors its business was fortified against turbulence in the credit markets and worthy of a top-notch rating. "Our own conclusion is that the market has overreacted to the real and obvious problems that we've had," Chief Executive Gary Dunton said. Investors responded, sending MBIA shares 11% higher to $15.50, reversing losses that saw the stock go as low as $11.80.
BUSINESS
January 19, 2008 | From Reuters
A unit of Ambac Financial Group Inc. lost a crucial top AAA credit rating Friday, raising questions about the bond insurer's ability to win new business and possibly forcing some investors to sell billions of dollars of municipal bonds and other securities guaranteed by the company. Fitch Ratings cut Ambac Assurance Corp.'s top rating after the bond insurer, citing weak demand, scrapped plans to sell $1 billion of new equity. Ambac, the world's No.
BUSINESS
November 1, 2010 | Reuters
Ambac Financial Group Inc., which was the second-largest U.S. bond insurer before suffering huge losses on risky mortgages, said it may file for bankruptcy protection as soon as this year after skipping a bond interest payment. The announcement is the latest setback for Ambac, which has struggled to stay solvent after the housing market collapse. Ambac had pursued higher profit by expanding beyond municipal bond insurance and starting to insure riskier debt. That move backfired as credit tightened and more borrowers defaulted.
BUSINESS
January 11, 2008 | From Times Wire Services
A planned $1-billion debt sale by MBIA Inc. may be delayed until next week, investors familiar with the offering said Thursday, as investors demand greater concessions to help the world's largest bond insurer shore up its capital and defend its rating. The news came a day after MBIA slashed its dividend and said it would sell $1 billion of so-called surplus notes and buy reinsurance. The moves are part of an effort to preserve capital and the triple-A ratings the bond insurer needs to operate normally.
BUSINESS
February 19, 2008 | From Times Wire Services
Bond insurer Ambac Financial Group Inc. is in discussions to split itself up in a move aimed at ensuring that municipal bonds backed by the company retain high credit ratings, the Wall Street Journal said on its website Monday. A deal could fall apart because of the complexities in such a move, said the report, quoting a source familiar with the situation. A halving of Ambac would create one unit to insure municipal debt and one that would cover loss-ridden bonds tied to mortgages in a structure that would in effect create a "good bank" and a "bad bank," the report said.
BUSINESS
August 29, 2008 | Tim Paradis, The Associated Press
Stocks barreled higher Thursday after a better-than-expected reading on the gross domestic product gave investors some reassurance that the economy was holding up. The Dow Jones industrial average jumped more than 200 points. But the rally may have been exaggerated by light trading volume, typical for the week before Labor Day. Financial stocks surged after a deal between two bond insurers boosted hopes that the credit markets were beginning to right itself. A decline in oil prices also appeared to benefit stock prices.
BUSINESS
March 28, 2008 | From Times Wire Services
California Treasurer Bill Lockyer is exploring the possibility of having the state's giant pension funds create a bond insurer. In the meantime, Lockyer has no immediate plans to use Berkshire Hathaway's new bond insurance unit after the head of the unit defended using different rating scales for municipal and corporate issuers, Tom Dresslar, a spokesman for Lockyer, said Thursday. The treasurer has been pressing rating firms to grade municipal bonds on the same scale used for corporate debt.
BUSINESS
March 27, 2008 | From Times Wire Services
FGIC Corp. said that its exposure to mortgage losses exceeded legal risk limits, raising more doubt about its future, as the bond insurer said it was walking away from an agreement to provide $1.9 billion in guarantees on certain securities linked to home loans. New York-based FGIC, the parent of Financial Guaranty Insurance Co., said its exposure to claims exceeded risk limits required by the state. "This is a bombshell," said Rob Haines, senior insurance analyst at CreditSights in New York.
BUSINESS
March 6, 2008 | From Times Wire Services
The stock market managed a moderate gain Wednesday despite a downbeat assessment of the economy by the Federal Reserve and disappointment about a plan to pump capital into a troubled bond insurer. The Fed's so-called Beige Book report on regional economies indicated that growth at the start of the year was sluggish and accompanied by upward pressure on prices. The report also cited tighter credit standards. Meanwhile, Ambac Financial said it planned to sell more than $1 billion in common stock to help shore up its battered balance sheet.
BUSINESS
March 6, 2008 | Walter Hamilton, Times Staff Writer
Troubled bond insurer Ambac Financial Group Inc. said Wednesday that it would raise $1.5 billion in capital by selling shares in an effort to preserve its all-important credit rating, but the plan disappointed Wall Street and its stock price tumbled. Like other bond insurers, Ambac has significant exposure to faltering sub-prime mortgage securities and needs to boost capital to guard against large-scale defaults. However, Wall Street expected the company to raise as much as $3 billion, and its apparent inability to do so at an acceptable price underscored its financial predicament.
BUSINESS
February 26, 2008 | From Times Wire Services
MBIA Inc., the world's largest bond insurer, held onto its top credit ratings from Standard & Poor's on Monday, quieting fears that downgrades by S&P would worsen the long-running credit crisis. S&P said it grew more confident about MBIA's stability after the insurer this year raised $2.6 billion by issuing new shares and debt. But the outlook for MBIA's ratings over the next six months to two years remains negative because of the size of its potential losses compared with the insurer's capital cushion, S&P said.
BUSINESS
January 23, 2008 | From Times Wire Services
Ambac Financial Group Inc., the first bond insurer to lose a AAA credit rating because of sub-prime mortgages, said Tuesday that it was considering "strategic alternatives" after posting its biggest loss. Shares jumped 29% on optimism that it might be sold. The second-largest bond insurer posted a fourth-quarter loss of $3.3 billion, or $31.85 a share, after writing down by $5.2 billion the value of credit derivatives tied to loans made to homeowners with poor credit, the company said.
BUSINESS
January 25, 2008 | From Times Wire Services
Billionaire investor Wilbur Ross is in serious talks to buy beleaguered bond insurer Ambac Financial Group Inc., according to a published report. Shares of the company surged on the report in Britain's Evening Standard newspaper, which said Ross might reach a deal in the next two weeks to acquire New York-based Ambac. The newspaper cited unidentified sources. Ambac shares rose 98 cents, or 8.6%, to $12.31 in after-hours trading Thursday. During the regular session the stock tumbled $2.37, or 17%, to $11.33.
BUSINESS
February 26, 2008 | From the Associated Press
Stocks rallied Monday on hopes that troubled bond insurers will emerge from the sub-prime mortgage debacle on solid footing. The Dow Jones industrials rallied nearly 190 points. Share prices shot up after Standard & Poor's affirmed its credit ratings for MBIA, the world's largest bond insurer. Other developments helping the market included a report from the National Assn. of Realtors showing that sales of existing homes fell less than forecast in January.
BUSINESS
February 23, 2008 | From Times Wire Services
Stocks rallied in the final 30 minutes of trading Friday, helping blue-chip indexes post their second straight weekly gain, as speculation that bond insurer Ambac Financial Group might be rescued overcame worries about the economy's slowdown. After trading in negative territory for most of the session, stocks turned positive after CNBC television reported that a bank rescue of Ambac might come as soon as next week. Sources later told reporters that a deal could be announced Monday or Tuesday.
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