NU Online News Service, Aug. 10, 3:41 p.m. EDT
Bond insurer Ambac Financial Group Inc. reported it had a second-quarter net loss of $2.4 billion, driven by loss expenses related to its residential mortgage-backed securities (RMBS) and other-than-temporary impairment investment losses.
The loss compares to 2008 second-quarter net income of $823.1 million.
For the first six months of 2009, the New York-based company reported a net loss of $2.8 billion, compared to a net loss of $837 million a year ago.
Regarding the quarterly loss, Ambac said, "Net loss and loss expenses incurred amounted to [$1.2 billion] for the quarter, primarily relating to second-lien and Alt-A RMBS transactions.
"AAC [Ambac Assurance Corporation] and the investment agreement business recorded other-than-temporary impairment losses amounting to $675.4 million and $186.7 million, respectively, related to the decision during second-quarter 2009 to sell certain investment portfolio securities."
Net premiums earned in the quarter dropped 45 percent to $177.7 million, compared to $325.5 million a year ago.
David Wallis, Ambac's president and chief executive officer, said, "The quarter's financial results are obviously very disappointing, as continued poor performance of the mortgage-related portfolios and rising forward interest rates have escalated projections of future claims. While overshadowed by our results, we continue to work hard and make progress in our expanding risk management activity."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.