Ambac Financial Group Inc., the world's second-largest bond insurer, posted a wider loss than analysts estimated after being crippled by writedowns for guarantees on subprime-mortgage securities.
The first-quarter net loss was $1.66 billion, or $11.69 a share, compared with $213.3 million, or $2.04, a year earlier, the New York-based company said today in a statement. The company's operating loss of $6.93 a share was larger than the $1.82 estimated by six analysts surveyed by Bloomberg.
Ambac, which was stripped of one of its three AAA ratings this year, was ``severely impacted'' by the plunging value of mortgage- related guarantees, interim Chief Executive Officer Michael Callen said in the statement. Ambac's new business slumped 87 percent and the company took a $1.04 billion provision for losses on mortgage securities. Ambac insured 1 percent of municipal bonds sold in the quarter, according to Thomson Financial.
Let me get this straight.
-- Ambac loses over $11 per share.
-- They have an operating loss of over $6/share
-- They have to raise capital
-- Their new business dropped 87%
To say this company has had a reversal of fortune is too kind. And they still have a AAA rating? What in God's name are the rating agencies smoking?
