More Bad News From MBIA
Posted on December 20th, 2007 by MoverMike
The WSJ reports
Confidence in top bond insurer MBIA Inc. plummeted Thursday after the guarantor disclosed on its Web site that it had $8.1 billion in exposure to complex and risky securities backed by home loans.
The $8.1 Billion risky securities are CDOs-squared, which repackage other CDOs and securities linked to subprime mortgages. We are seeing spreads on credit default swap soar to over 570 basis points. “That means it costs $570,000 a year for an investor to protect $10 million in MBIA bonds from default for five years.” Eleven weeks ago the stock of MBIA (MBI) was about $70 per share, Today it broke $20.
Discussion Area - Leave a Comment