Monolines Realign [Housing Tracker]

Monoline News

FSA Leads Insurance Rankings. “Thomson: The downgrades to most monolines allowed the remaining triple-A bond insurers to gain larger shares of a significantly smaller market… With deals down to $53.7 billion from $112.4B through H1’08, leader Financial Security Assurance controlled more than half the market, with a 53.2% market share through June. It has backed 1,099 issues with a par value of $31.6B, compared to $23.3B on 878 issues through June 2007. Second-ranked Assured Guaranty Corp. had insured $16.2B on 486 issues for a 28.3% market share through H1’08. It wrapped just $3.6B in 2007. Berkshire Hathaway Assurance Corp. (BRK.A), the third triple-A rated insurer… ranking fifth with two deals worth a total of $361.2 million… MBIA Insurance Corp. (MBI) and Ambac Assurance Corp. (ABK), ranked third and fourth, insuring $1.2B and $484.2M, respectively, through June.”  (Bond Buyer, July 14^th)

MBIA Battered By Competition, Subprime Issues.  “MBIA, The world's largest bond insurer has taken charges on billions of dollars of exposure to bonds tied to subprime mortgages and derivatives. It also faces new competition for bond insurance from Berkshire Hathaway Assurance, which has a stronger balance sheet… Moody's Investors Service, S&P and Fitch Ratings dropped… MBIA's longtime AAA rating… Moody's believes [further housing] losses could materially affect capital levels… Some pluses: MBIA is expanding internationally, and the longevity of the bonds it insures means consistent revenue. It also has a successful advisory subsidiary... Thomson financial: MBIA's losses this year are expected to increase fourfold over last year's… compared with the 19% drop in earnings forecast for the… industry.”  (St. Louis Today, July 13^th)

Texas Toll Road Agency Leads Muni Market With $1 Billion Sale.  “The North Texas Tollway Authority led borrowers in the municipal bond market with a US$1 billion sale Thursday to help finance a new toll road outside of Dallas. Florida's Miami-Dade County will offer $468 million of water and sewer system revenue bonds... The Dallas-area toll-road operator revived a deal that was delayed in May amid rising borrowing costs… The Texas authority sold bonds maturing from 2031-2038... [One] underwriter, Lehman Brothers, received sufficient demand to raise the price and lower the yield on 30- year bonds… after initial pricing. Bloomberg: State and local government borrowers are selling about $6.2B of fixed-rate bonds this week, close to the weekly average this year and up from $1.5B last week.” (New Brunswick Business Journal, July 11^th)

Ambac Insuring $264 Million For Air Force Project.  “Bond insurer Ambac Financial Group Inc. said Friday it is insuring a $264 million privatization of 3,500 Air Force housing units. The project to privatize 3,500 existing single-family and townhouse-style housing units will take place at three separate bases. Ambac is collaborating with the Air Force, Balfour Beatty Construction Co., and Capmark Finance. The bases involved include Fairchild Air Force Base in Spokane, Wash., Tinker Air Force Base in Oklahoma City, Okla., and Travis Air Force Base in Fairfield, Calif.”  (Forbes, July 11^th)

Kfw To Bear Some Potential IKB Lawsuit Costs.  “German state-owned development bank KfW will bear some of the cost of billions of euros of potential lawsuits against lender IKB, according to a government paper seen by Reuters on Friday. IKB, a lender to medium-sized companies, nearly went bust last year after its subprime-linked investments turned sour and faces lawsuits, including one worth $1.9 billion from U.S. insurer FGIC.”  (Reuters UK, July 11^th)

PMI Releases Mid-Year Update.  “[After] Moody's Investors Service lowered PMI Mortgage Insurance Co. (PMI) insurer financial strength ratings from A3 to Aa2, [PMI announced] as of March 2008 PMI's combined mortgage insurance companies had statutory capital of $2.6 billion, liquid assets of $2.8B, and premium income from $124B of primary insurance in force. In H1’08, PMI's Mortgage Insurance Operations paid approximately $370 million in claims. PMI is tightening their full-year 2008 U.S. paid claims guidance range to between $900M-$975M. Loan “workouts” reviewed and approved directly by PMI for H1’08 totaled 3,217, an increase of 124% over H2’07. Nearly 53% of these workouts helped homeowners stay in their homes. Of the new insurance written by U.S. Mortgage Insurance Operations, 98% were fixed-rate.”  (Default Servicing News, July 11^th)

 

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