Shares of bond insurer MBIA (MBI) are down 68 cents, or 7.3%, at $8.65, after the firm this afternoon reported a much-deeper-than-expected per-share loss and saw its reported book value fall by almost half.
Q1 net loss of $1.5 billion, or $7.22 per share,�more than doubled from the prior-year period thanks to a $2.2 billion unrealized loss from marking to market credit derivatives, the firm said. Analysts had been modeling roughly $1 per share in net losses.
The change in fair value of credit derivatives prompted a drop in the company’s book value to $6.61 from $12.66. Excluding the charge, adjusted book value per share dropped slightly from $36.35 to $36.01.
Excluding the $2.2 billion loss on derivatives, the company had a pre-tax loss of $48 million.
On an adjusted basis, “Our businesses operated near breakeven,” said MBIA CEO Chuck Chaplin.
Indeed, the company’s National operations covering U.S. public finance insurance contributed $20.87 per share to adjusted book value based on premia earned for the quarter.
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