MBIA Reports $213 Million Third-Quarter Net Loss on Derivatives Contracts
November 11, 2010 by admin · Leave a Comment
MBIA Inc., the bond insurer seeking to jumpstart its business of guaranteeing municipal debt, reported a $213 million net loss in the third quarter on a change in the value of derivatives contracts that reduced an accounting benefit.
The loss of $1.06 a share in the three months ended in September narrowed from $728 million, or $3.50 a share a year earlier, according to a statement today. Excluding the change in the value of derivatives, the company had an adjusted pretax loss of $68 million as the company increased its expectations for losses on guarantees of collateralized debt obligations and commercial-mortgage securities.
Armonk, New York-based MBIA was shut out of the bond guarantee business after being stripped of its top insurance ratings in June 2008 because of losses on mortgage-linked debt it insured. Chief Executive Officer Jay Brown is seeking to start insuring city and state debt again by separating the company’s municipal and structured-finance businesses.
