Bond insurer Ambac Financial Group (ABK) lost a net $392.2m, or $1.36 a share, in Q109 as its platform linked to residential mortgage-backed securities (RMBS) continued to deteriorate. A positive net change in fair value of credit derivatives drove $279.7m in pre-tax net income, company executives say in the earnings statement today. Losses, loss expenses and other-than-temporary write-downs in Ambac’s RMBS portfolio offset much of the unrealized gain in credit derivatives. “The credit environment remains adverse, although perhaps the rate of degradation is slowing,” Ambac CEO David Wallis says in the statement. Certain Alt-A RMBS suffered $744.7 in other-than-temporary impairment write-downs, which drove the quarterly net loss, officials say. “Continued deterioration in the performance of the underlying RMBS loans was observed, most prominently in the Alt-A affordability product” which includes negative amortization and interest-only loans,” company executives say in the statement. Such steep losses and performance deterioration led Moody’s Investors Service in mid-April to slash the company’s Ambac Assurance bond insurance unit to junk. Company officials in the earnings statement said the downgrade of Ambac Assurance and Ambac Assurance UK to Ba3 from Baa1 had no material impact on corporate-wide liquidity or collateral requirements. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.
Ambac’s RMBS Losses Continue
Most Popular Articles
Latest Articles
11 iconic real estate logos + Tips to design (or refine) yours
What is your real estate logo saying about you and your brand? Find out how to tell your story persuasively with your brand mark.
-
Streamlining property tax management: The CoreLogic Advantage for unmatched efficiency and accuracy
-
Disband or rebrand DEI? Three considerations for your association or firm
-
Mortgage groups gear up to get trigger leads bill passed in 2025
-
CFPB sues Rocket, The Jason Mitchell Group over RESPA violations
-
The homebuilders’ 2025 supply and demand problem