Further Drop In Bond Insurance Demand [Housing Tracker]

Monoline Insurers 

Moody's Warns On Assured Guaranty's Aaa Rating.  “Moody's Investors Service said late Monday that it may downgrade the Aaa ratings of Assured Guaranty and Financial Security Assurance, two bond insurers that had managed to hold on to these crucial top ratings by avoiding some of the mortgage-fueled credit carnage this year. The agency put the Aaa ratings of Assured Guaranty (AGO) on review for a possible downgrade partly because of the complexity of the credit risks that have been taken on by the bond insurer and a drop in demand for the guarantees sold by the bond insurance industry.”  (MarketWatch, July 21^st) 

Stancorp Financial Group Q2 Profit Declines - Update. “StanCorp Financial Group Inc. (SFG) said its Q2 profit declined from last year, due to impairment write-downs of debt security holdings of bond insurers. Net income for Q2 was $48.4 million, down from $52.1M in Q2’07. Earnings on a per share basis improved to $0.98, from $0.97 in Q2’07, due to a lower share count for the current quarter. The result for the latest quarter included after-tax capital losses of $14M, related to impairment write-downs of debt security holdings of bond insurers Ambac, Radian and MBIA. Excluding items, net income would have been $26.3M or $1.26/share, compared to $51.7M or $0.96/share in the year-ago quarter. On average, analysts expected the company to earn $1.16/share for Q2.” (Press Release, July 21^st) 

MGIC Loses $97.9M In 2Q Amid Ongoing Housing Slump. “MGIC Investment Corp. (MTG), the nation's largest mortgage insurer, said Thursday it lost nearly $100 million in the previous quarter as the housing slump continued to batter the industry, but its shares rose more than 35% as part of a broader rally in the financial sector. Mortgage delinquencies and home foreclosures remain high, the company said, leading to a loss of $97.9 million, or $0.79/share, in the quarter ended June 30. In the same quarter last year, MGIC reported profits of $76.7M, or $0.93/share.” (Wisconsin Wire, July 17^th)

 

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