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’An unusual letter from the Fed, an unwinding of hedges
That’s a sudden spike in trade volume right around Tuesday of this week. As a reminder, this index tracks CDS on 125 investment-grade names, including the monoline MBIA.
We bring it up because Creditflux reported earlier this week that MBIA CDS rallied (i.e.
Finra probing subprime RMBS offerings
Finra, a regulator with an impressive track record of investigatory failures, is looking into the accuracy of disclosures linked to subprime RMBS offerings, according to a Reuters report on Thursday.
According to the Reuters report,
CDO? CD-Ooooooh…
The monoline moan du jour comes courtesy of MBIA.
The bond insurer published fourth-quarter results on Tuesday, showing a net loss of $1.2bn.
Monoline-watchers will remember that the company’s been in something of a death spiral since the financial crisis,
The unenviable, uncertain future of the bond insurance industry
One of the most common criticisms of the financial media unleashed during the Not So Great Depression was “you didn’t warn us about [insert little known company, acronym, structured product or dubious form of home loan,
MBIA accuses Credit Suisse of ‘pervasive and material misrepresentations’
The battle between the bond insurers and the investment banks — as regards who knew what about mortgage-backed securities — intensified on Monday.
MBIA, once the mightiest of the monolines, filed a lawsuit in Manhattan court against Credit Suisse that accuses the bank of making “fraudulent misrepresentation”
Ambac warns of bankruptcy risk
The train wreck that is the bond insurance industry always provides interesting headlines. MBIA, once the sector’s leading light, on Monday reported a $728m loss for the third quarter of 2009. Ambac, its long-time rival,
S&P junks MBIA
Late on Monday, S&P downgraded MBIA, once the strongest of the bond insurers, by two notches to BB+. That’s right — into ‘non investment grade’ territory.
As RBS’ credit analysts pointed out in a note on Tuesday,
Monoline vertigo
Your daily dose of structured finance irony served right here, in the below statement from ratings agency Fitch:
CHICAGO–(BUSINESS WIRE)–Fitch Ratings has reviewed MBIA Capital Management Corp. (MBIA
Financials fall on toxic assets warning
Financial stocks led US equities to their worst day in more than a month on Tuesday after the Congressional Oversight Panel, which runs the US government’s TARP scheme, warned that the Treasury had not done enough to relieve banks of toxic assets.
Moody’s and the monolines
More monoline difficulty:
New York, July 14, 2009 — Moody’s Investors Service is modifying the rating methodology it applies to structured finance securities insured by financial guarantors. Specifically,
MBIA shares soar on profit news
MBIA, once the largest US bond insurer, reported Monday it had swung to a first-quarter profit after a huge year-earlier loss, sending its shares up 18% in after-hours trade, reports Reuters. MBIA’s quarterly results were helped by an accounting gain of about $1.6bn,
Aurelius Capital fails to trigger MBIA CDS payouts
Alea spotted this statement out from ISDA:
It’s from the newfangled ISDA CDS determinations committee, and it refers to an earlier formal request for the committee to ascertain whether CDS written on MBIA – the failed bond insurer – could be said to have been triggered under the terms of a “succession event”.
Bond insurers vs investment banks, redux
Funny thing, déjà vu.
About one year ago, Merrill Lynch and SCA Capital – known, somewhat ignominiously, as the first triple-A rated bond insurer to be stripped of that designation – were involved in a messy legal dispute over insurance on collateralized debt obligations.
Bank groups to meet Dinallo on MBIA
Some 15 financial companies will meet Thursday with Eric Dinallo, New York state’s insurance superintendent, to complain about a decision by MBIA, the world’s largest bond insurer, to split its bond insurance unit into two companies,
MBIA to focus on muni bonds
MBIA, once the world’s biggest debt insurer, is setting up a new company entirely focused on the US municipal bond market in an effort to leave behind problems stemming from its exposure to mortgage-backed securities.
Moody’s joins S&P, downgrades MBIA
Following S&P and in response to MBIA’s restructuring plan, Moody’s downgraded the bond insurer to B3 from Baa1 on Wednesday, and put MBIA Illinois (the new-fangled muni-only bit of the company) on watch for possible upgrade.
MBIA gets junked
Well, nearly.
(BN) *MBIA INSURANCE CORP. CUT TO BBB+ FROM AA BY S&P
Triple B+ is in the lower end of the investment grade spectrum, but it’s a far cry from that gilded triple-A of yore.
And here’s the statement (our emphasis):
The death throes of the bond insurers
Ambac’s share price hit an all-time low on Wednesday, falling below $1 a share for the first time in the company’s history as a public company.
Why? A rather savage downgrade from S&P, which cut the bond insurer’s financial strength rating to A from AA,
Moody’s cuts MBIA to Baa1
Lest Ambac be too lonely, Moody’s on Friday downgraded MBIA’s insurance financial strength to Baa1 from A1 and cut to junk (from Baa2 to Ba1) the rating of the parent (holding) company.
From Moody’s,
CDS update: Euphoria fades
A fresh batch of disappointing data in Europe and poor results from two major US financial guarantors weighed on sentiment in the market for credit default swaps on Wednesday, sending spreads wider on both sides of the Atlantic.
MBIA sues Countrywide Financial
MBIA Insurance is suing Countrywide Financial, alleging that the mortgage lender fraudulently induced MBIA to guarantee billions of dollars of Countrywide mortgage bonds that have cost the embattled bond insurer more than $459m.
Paterson sets his sights on Spitzer’s title
No, not Client 9 – we’re talking Sheriff of Wall Street here.
Governor David Paterson, who succeeded Eliot Spitzer in March, has decided to regulate a portion of the “market for short selling bonds”
Ambac, MBIA paths diverge
Time was when a statement from one of the big two bond insurers would induce a market panic. This is no longer true, but there’s still a lot happening at MBIA and Ambac – not least Moody’s threatening to downgrade them yet again.
Oh snap, we’d almost forgotten about the bond insurers
But Moody’s clearly hasn’t – the ratings agency is threatening anew to downgrade MBIA and Ambac (remember them?)
Highlights from the statement:
New York, September 18, 2008 — Moody’s Investors Service
Monoline Re
From MBIA:
(BUSINESS WIRE)–MBIA Inc. (NYSE: MBI – News) today announced that its insurance subsidiary, MBIA Insurance Corporation (MBIA), has agreed to reinsure a portfolio of U.S. public finance bonds (the “public finance portfolio”) insured by Financial Guaranty Insurance Company (FGIC) with total net par outstanding estimated to be approximately $184 billion as of September 30,
Sector snap: monoline insurers and the GSEs
It’s getting harder to play the mortgage market, if the relative performance of the varied monoline insurers and Fannie Mae and Freddie Mac is any thing to go by.
Ambac and MBIA are up and down like a [CENSORED! Ed.] this morning:
Ambac, MBIA dodge a bullet at S&P
Ambac And MBIA Insurance ‘AA’ Ratings Affirmed And Taken Off CreditWatch; Outlook Negative
NEW YORK Aug. 14, 2008–Standard & Poor’s Ratings Services said today it affirmed its ‘AA’ financial strength ratings on both MBIA Insurance Corp.
Fresh GIC threat to bond insurers
Concerns have surfaced about fresh risks to bond insurers that could further darken the outlook for the most troubled groups and affect the last remaining insurers with triple A credit ratings. On top of heavy losses on subprime mortgage-related bonds that they guaranteed,
Number crunching: Monoline writedowns
An RBS credit research note circulated earlier to clients noted that banks have so far taken $25.7bn in writedowns against their monoline exposure.
That is, writedowns on the market value – or effectiveness – of CDS as insurance contracts against existing gross holdings of ABS CDOs.