MBIA $4 Billion From Its Investment Portfolio; Ambac's Investment Portfolio
Ambac shares are really getting killed today (down 20% on no news). I wonder if it has to index changes (Ambac was removed from Russell 1000 on Friday and inserted into the Russell 2000 today.) Further decline will result in a risk of being de-listed from NYSE (although that risk is not near)... MBIA disclosed that it liquidated a portion of its investment portfolio , to the tune of $4 billion to satisfy collateral and early redemption requirements due to it being downgraded. It also denied a report from last week's Wall Street Journal saying that it had sold muni bonds. The bad news is that it resulted in $300 million in losses. The losses were supposedly already taken before but the sales crystallized the unrealized loss to a real loss. For those not familiar, the investment business is seperate from the insurance business. The monolines agree to manage the funds collected by municipalities and others in exchange for payments. If the monolines get downgraded, they are requireed t