MBIA, a monoline insurer backed by Warburg Pincus, had a net loss of $2.4 billion (€1.55 billion) for the first quarter of 2008.
MBIA: $2.4bn loss
he majority of the net loss was related to a pre-tax $3.6 billion write-down of the company’s insured credit derivatives, including $800 million of credit impairments, MBIA said in its first quarter results.
During the first quarter of 2007, MBIA’s income was $198.6 million. This quarter’s loss equated to $13.03 per share compared to $1.46 per share profit during the same period last year.
Total revenue was $711.4 million down 4 percent from $741.7 million in the same period last year.
Despite the loss, MBIA’s shares rose to $9.95 per share at its last trade yesterday, up 6.4 percent. Investors had been pre-warned to expect losses last week.
In December Warburg Pincus committed to invest $1 billion in MBIA in one of the first capital injections to a financial company by a private equity firm since the credit crunch. Warburg Pincus initially invested $500 million of this commitment in December, at $31 per share. Following the further collapse of the insurer’s share price the private equity firm subsequently took part in a MBIA rights issue at $12.15 per share in February, investing a further $300 million.