MBIA loses $728 million as slowdown hits bond insurer

Market Watch ^ | 11/09/09 | Alistair Barr

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Nov. 9, 2009, 6:20 p.m. EST

MBIA loses $728 million as slowdown hits bond insurer

Bond insurer pays $638.4 mln in third-quarter net claims on mortgage securities

By Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- MBIA Inc. reported a quarterly loss of nearly $730 million late Monday as the bond insurer continued to struggle in the face of an economic slowdown and depressed housing market.

The company said it paid $638.4 million in net claims during the third quarter, mainly from guarantees it sold on residential mortgage securities.

MBIA shares fell 15% to $4.06 in after-hours trading. The stock had rallied more than 10% during regular market action on Monday.

MBIA (NYSE:MBI) reported a third-quarter net loss of $727.8 million, or $3.50 a share. That compares to a net loss of $806.5 million, or $3.42 a share, in the same period a year earlier.

The loss was driven by an $810.2 million pretax unrealized loss on insured credit derivatives, $238.8 million in pretax loss and loss-adjustment expenses mainly from the company's insured exposures to second-lien mortgage loan securitizations, and $171.4 million in pre-tax realized losses and other-than-temporary impairments on investments, MBIA explained.

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