Assured Guaranty posts 1st-quarter loss on increased reserves for faulty mortgage securities

: Assured Guarantee Ltd. swung to a first-quarter loss on higher militia for rickety mortgage-backed bonds.

Operating net income drop well short of analyst estimations despite a crisp addition in insurance premium income, and the company's shares plunged 13 percentage in electronic aftermarket trading.

The Bermuda-based firm, lauded in recent calendar months for avoiding the hazardous mortgage-related concern that crippled many of its competitors, succumbed to a crisp diminution in the value of chemical bonds it sees that are backed by place equity lines of credit.

Assured's loss reached $169.2 million (€110.25 million), or $2.11 per share. A twelvemonth earlier, the house earned $39 million, or 57 cents per share.

Operating income dropped to $6.2 million (€4.04 million), or 8 cents per share, from $46.1 million, or 67 cents, in the same time period in 2007. Gross rose 25 percentage to $107.8 million. Today in Business with Reuters

Those consequences drop short of estimations on Wall Street, where analysts expected operating income of 65 cents per share and gross of $112 million (€72.98 million).

"We further downgraded some U.S. (residential mortgage backed securities) exposures, in peculiar those related to to place equity lines of credit, which generated loss militia that countervail our operating income in the quarter," Head Executive Saint Dominic Frederico said in a statement.

The loss on recognition derived functions reached $175.8 million, but was bigger than the company had expected, according to William Blair analyst Mark Lane.

"They said worst-case would be $100 million in recognition losses, so it's hard to acquire your weaponry around how much exposure is still out there," he said.

Frederico said the downgrades "reflect our uncertainty" about how chemical bonds backed by place equity loans will perform.

Meanwhile, Assured continued to spread out its marketplace share, taking advantage of major lurches by its rivals in this once-conservative industry, which used to see only municipal bonds.

The firm's new concern reached $276.6 million (€180.23 million)in the period, more than than dual the year-ago result. Premium income more than tripled.

Competitors such as as MBIA Inc. and Ambac Financial got caught wrong-footed when they started insuring mortgage debt and riskier, more than composite investments. The hazard that those types of chemical bonds will ensue in higher claims cost them top-notch credit evaluations that are indispensable in the business.

Assured have been "gaining monolithic marketplace share," Lane said, because it is one of lone two chemical bond insurance companies with 'AAA' evaluations from all three major agencies.

Last month, billionaire investor Wilbur John Ross bought shares worth $250 million (€162.9 million) in the company and promised to put another $750 million (€488.69 million) more than to finance its awaited growth.

Ross, who was appointed to Assured Guaranty's board, at the clip said he was "greatly impressed" by the "dramatic additions in marketplace share" the company had earned.

In electronic aftermarket trading, Assured shares cast $3.34, or 13 percent, to $22.05 after shutting Thursday at $25.39. In the past year, the stock have ranged from $13.34 to $31.