Financial Security Assurance (FSA) was sold by Dexia as the European bank reported a $1.9 billion loss. Assured Guaranty, Wilbur Ross), purchased the monoline insurer for $1.45 billion. It is important to note that this sale did not include Dexia’s exposure to some 16.5 billion Euro exposure to toxic US subprime mortgage assets. This brings more assets to Ross who has been looking at purchasing more monoline insurers for his Assured Guaranty.
It seems likely that losses from monoline exposure could impact second quarter earnings by nearly $10 billion, nearly doubly the previous loss amount. The hardest hit among financial companies will likely be Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), and UBS (NYSE: UBS). Such is the latest from Meredith Whitney from Oppenheimer. It is likely that Citigroup will post another loss, perhaps has high as $.50 per share, compared to previously expected quarter in the black.
Finally. Standard & Poor’s downgraded monoline bond insurers MBIA (NYSE: MBI) and Ambac (NYSE: ABK) to AA from AAA on June 5. This seemingly went over as a nonevent on Wall St. yesterday and one has to wonder - Moody’s (NYSE: MCO) what are you waiting for now? The credibility of these ratings agencies is all be kaput. This will affect around $1 trillion in bonds.
Cooper Developers - Powered by WordPress