MBIA loses $2.4 billion on write-downs
Business Law
MBIA Inc. reported Monday a loss of more than $2 billion for the first quarter after taking a $3.6 billion charge for losses on derivatives, but shares of the embattled bond insurer traded as much as 10% higher.
Posting its third straight quarterly loss, MBIA continues to struggle with business difficulties in the face of falling house prices and a global credit crisis, but Chief Executive Jay Brown sounded an optimistic note.
"MBIA continues to be a sound financial institution," Brown said in a statement. "We have ample liquidity, our balance sheet is built to withstand credit stress levels many multiples of what we're experiencing now, and our business model is proving that we are adequately capitalized to satisfy any potential claims on our insured portfolio."
Shares of MBIA rose more than 6% to $10.04 in morning action, after reaching an intraday high at $10.35.
The company's net loss was $2.41 billion, or $13.03 a share. MBIA had earned $198.6 million, or $1.46 a share, in the year-earlier first quarter.
During the latest quarter, it recorded a $3.6 billion unrealized loss on insured derivatives.
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