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’MBIA sells muni bonds to raise cash
Bond insurer MBIA is selling municipal bonds to raise cash as it moves to make billions of dollars in payments that were triggered by its recent rating downgrade by Moody’s, reports the WSJ. MBIA’s asset-management unit was recently in the market selling at least $500m worth of municipal bonds,
Fitch capitulates, withdraws all ratings on MBIA and Ambac
The statement:
Fitch Ratings is withdrawing all of its outstanding ratings on MBIA Inc, MBIA Insurance Corp. (MBIA), and other related entities. Also, Fitch is withdrawing all of its outstanding ratings on Ambac Financial Group,
CDS update: it’s all about the bond insurers, baby
Traders in the market for credit default swaps are treating MBIA and Ambac like the most distressed of credits, as doubts around the viability of the insurers’ business models mount.
Five year CDS contracts on MBIA’s bond insurance unit hit a record of 42.5 points upfront on Tuesday,
When the bond insurers finally go…
How solvent are the bond insurers? A little less so as of today. From MBIA:
As a result of the downgrade to A2, MBIA expects that it will require $2.9 billion to satisfy potential termination payments under Guaranteed Investment Contracts (GICs).
Bond insurers seek to wipe out contracts
Bond insurers such as Ambac, MBIA and FGIC are talking to banks about wiping out $125bn of insurance on risky debt securities, in what could be the only way to limit the financial damage surrounding the so-called monolines.
Weekend catch-up
In case you missed these stories:
Morgan Stanley to probe controls
Morgan Stanley’s internal probe into the suspected rogue trader who allegedly caused a $120m writedown is set to focus on why the bank’s internal controls did not send an early warning sign about the trader’s own valuation of his derivatives book.
The end of MBIA and Ambac?
Moody’s downgrading of MBIA and Ambac should be a cathartic event.
It means that the companies – in current form – will not write business ever again.
MBIA has been downgraded all the way to A2. It.
Moody’s downgrades Ambac, MBIA
Moody’s on Thursday stripped the bond insurance arms of Ambac Financial Group and MBIA of their Triple A ratings, downgrading Ambac to Aa3 and MBIA to A2, citing their impaired ability to raise capital and write new business,
Monowhine II
This thing is over already, the market just doesn’t know it yet.
- Bill Ackman, speaking on Wednesday in New York.
He refers, of course, to the continuing existence of the monolines. Though he could equally be talking about his own involvement with them – since he’s widely believed to have closed out his shorts on Ambac and MBIA already.
Credit creep and the monoline monsters
The impact of monoline downgrades on banks’ Q2 numbers is back in focus. Monolines, full stop, are back in focus.
But no sooner had CreditSights done their run down of the prospect for damage among the European banks,
MBIA takes on the New York Times
Incomplete. Unreliable. Inaccurate. Misleading.
Those are just some of the adjectives MBIA hurled at the New York Times on Wednesday in an epic, 2076-word rebuttal (with footnotes) of a story written by Gretchen Morgensen and Vikas Bajaj,
Ambac asks Fitch to remove ratings
US bond insurer Ambac Financial Group said on Wednesday it has asked Fitch Ratings to remove its ratings on the company and all its subsidiaries, reports Reuters. Ambac said it decided to terminate its ratings contract as part of a re-evaluation of its ratings needs,
Ambac, like MBIA, wants Fitch to withdraw its ratings
This just out from Fitch:
Fitch Issues Statement on Ambac Withdrawal Request 18 Jun 2008 1:02 PM (EDT) Fitch Ratings-New York-18 June 2008: Fitch Ratings today received a request from Ambac Financial Group,
MBIA’s monoline endgame ethics
Yves Smith at Naked Capitalism says it is “shameful”: the holding company for monoline MBIA is pulling the plug on a $900m recapitalisation for its bond insurance subsidary. It’s holding onto the money for itself.
Banks face $10bn monoline charges
Citigroup, Merrill Lynch and UBS, the banks most exposed to Ambac and MBIA, could face further writedowns of up to $10bn after the bond insurers last week lost their fight to retain their triple A credit ratings and were downgraded by Moody’s and S&P,
Short View: Credit crisis returns
On Thursday, the market’s worst fears were realised, MBIA and Ambac Financial, the two biggest monoline bond insurers, lost their triple A credit rating from Standard & Poor’s.
Had this happened at any point in the first three months of this year,
Monoline flatline: S&P downgrades MBIA and Ambac
That’s it then.
NEW YORK (Standard & Poor’s) June 5, 2008–Standard & Poor’s Rating Services today lowered its financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to ‘AA’ from ‘AAA’ and placed the ratings on CreditWatch with negative implications.
Snap news
The latest on Friday,
- Standard & Poor’s finally removes triple A ratings from bond insurers MBIA and Ambac. Bloomberg. S&P statement
- SABMiller and Molson Coors get US regulatory nod to pursue MillerCoors joint venture.
Tilting at windmills, rating agency edition
Finally, perhaps, just maybe… recognition that there is no way MBIA and Ambac are triple A institutions? Moody’s put both monolines on review for downgrade, which given past treatment of them both could mean anything.
Moody’s moves on the monolines
More bad news for the bond insurers this afternoon, as Moody’s threatened to strip both Ambac and MBIA of their triple-A ratings.
The ratings agency didn’t mince words, warning it could downgrade MBIA – the larger of the two – to single-A and Ambac to double-A amid concerns over the companies’ credit profiles and capital adequacy.
Monolines back in the spotlight
Yves Smith at Naked Capitalism picks up a piece in Tuesday’s New York Post – surprisingly, on collateralised debt obligations and monoline bond insurers.
In a nutshell, the Post is reporting that monolines are hampering banks’ efforts to liquidate CDOs.
Second-lien fallout
There’s a monoline-related barney going on.
After raising capital in February and March, temporarily easing concerns about their future, the bond insurers are back in the spotlight. First there’s the matter of accountancy - and the prospect of having to set aside money to cover losses on troubled securities earlier,
Death by accountancy, monoline edition
More good news for monoline shorter Bill Ackman, with MBIA down 8.3 per cent and Ambac down 5 per cent on Friday.
Why? Because of this, from the FASB (HT, Naked Capitalism):
The recognition approach for a claim liability relating to a financial guarantee insurance contract requires that an insurance enterprise recognize a claim liability when the insurance enterprise expects,
Moody’s fit of pique: MBIA triple-A not so triple-A
What goes up…
MBIA – which filed its quarterly results on Monday – enjoyed something of a share price bounce. Odd considering that the results, by any yardstick, were dismal. Shareholders seemed more than willing to toe the line from CEO Jay Brown:
Writedowns push MBIA to $2.4bn loss
MBIA on Monday reported a $2.4bn loss for the first quarter as the world’s largest bond insurer took billions of dollars of writedowns on derivatives contracts in a deteriorating credit market. The loss was more than twice analysts’ estimates,
CDS report: Bond risk retreats as traders shrug off MBIA, HSBC woes
The perceived risk of US and European companies defaulting on their debt retreated on Monday, in spite of shocking results from bond insurer MBIA and significant writedowns at HSBC, Europe’s biggest bank.
Fitch downgrades MBIA
On Friday, credit-rating agency Fitch downgraded monoline MBIA.
AAA to AA might not be such a big leap, but it’s all the more galling in light of the spat between MBIA and Fitch a few weeks ago. Readers may remember that MBIA asked Fitch to withdraw its rating on the monoline,
Settlement risk: ISDA’s CDS monoline lists
The International Swaps and Derivatives Association has made some lists – specifically lists of all the CDS contracts out there which reference a monoline. Simply, all the “insurance” contracts on say,
Ditching Fitch – II
After MBIA’s rather peremptory email to Fitch last week requesting that the agency withdraw its rating on the bond insurer (an email Fitch promptly published), Fitch CEO Stephen Joynt, has hit back.
He accuses MBIA of being “disingenious”