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.

Xceed Mortgage Executives Resign; 74 Jobs Eliminated (Update1)

., the Toronto-
based mortgage loaner that have lost 60 percentage of its market
value this year, said Head Operating Military Military Officer and
Chief Financial Officer resigned as it struggles
to happen funding.

Xceed is cutting an further 74 occupations to cut down the size of
the company, it said today in a statement. It anticipates to take a
severance-related charge of $1.7 million and to compose down no
less than $4 million in fixed assets in the 2nd one-fourth ending
April 30.

Xceed, which seeks to go back to profitableness by the third
quarter, stopped offering uninsured mortgage merchandises this month
as a spreading recognition crisis in the U.S. made it hard to
find money to fund loans. The company's grading down to 38
employees and focusing on insured mortgages that tin be sold to
the Canada Mortgage Chemical Bond Program.

''We had hoped that after a sensible clip period of time the
environment would go calmer and we would be able to go back to
our past concern model,'' Head Executive Military Officer said
in the statement. ''There is no manner of knowing when we will be
able to go back to that concern model, if ever.''

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Mortgage lender Countrywide seeks to reassure investors amid rating cut, bankruptcy rumors

: Countrywide Financial Corp., the biggest U.S. mortgage lender, sought to reassure investors Tuesday, declaring it have ample capital, entree to hard cash and is well-positioned to profit from the fiscal disturbance rocking the mortgage sector.

The company's statement came amid rumours the Calabasas, California-based company could be looking to seek bankruptcy protection and as its stock tumbled at one point more than 15 percent.

Countrywide shares drop 32 cents, or 3 percent, to $10.25. At one point, the stock had dropped to a low of $8.21. Over the past 52 weeks, the stock terms have ranged between $10.25 and $45.26.

"Countrywide Depository Financial Institution ... have sufficient liquidness available to ran into its proposed operating and growing necessitates and have accumulated important contingent liquidness in response to evolving marketplace conditions," the company said.

The loaner have shifted the majority of its loan support through its banking arm from gross sales on the secondary marketplace in the aftermath of the liquidness crisis that flustered fiscal marketplaces following a spike in place loan defaults this year. Today in Business

Countrywide also noted it anticipates its place loaning unit of measurement to be able to service debt beyond adjacent twelvemonth without having to buy further debt insurance.

The company said it had $35.4 billion (€23.94 billion) in hard cash available as of Oct. 31, 2007, up from $33.6 billion (€22.73 billion) in the former month.

Countrywide's stock terms diminution came as Fox-Pitt, Kelton analyst Leslie Howard Shapiro cut his evaluation on the company to "In Line" from "Outperform."

Shapiro noted in a research short letter that Countrywide's sufferings could decline if the Federal Soldier Home Loan Mortgage Corp., Oregon Freddie Mac, is forced to scale back how many loans it purchases from mortgage lenders.

On Tuesday, Freddie Macintosh reported it lost $2 billion (€1.35 billion) in the 3rd one-fourth and warned it may necessitate to diminish its concern unless it can raise new capital.

Like other mortgage lenders, Countrywide pools the place loans it arises and sells them to investing Banks and government-backed mortgage Banks such as as Freddie Mac.

Freddie Macintosh is the No. Two U.S. purchaser and surety of mortgages, after Federal Soldier National Mortgage Association, or Fannie Mae.

Shapiro speculated the government-sponsored mortgage financier's problems could ensue in less support for lenders, a critical blow at a clip when Wall Street investing Banks have got pulled back on mortgage-backed debt amid rising home-loan defaults.

A decrease in support from Freddie Macintosh would halter Countrywide's ability to arise loans, causing its loan volume to fall additional this year, Shapiro wrote.

Last week, Countrywide reported that its mortgage loan supports dropped 48 percentage to $21.9 billion (€14.8 billion) in October compared to the year-ago month.

The company posted a loss of $1.2 billion (€810 million) during the one-fourth ended Sept. 30.

Management said last calendar month the company would post a net income in the approaching one-fourth and adjacent year.

Still, Moody's Investors Service said Tuesday there is a possibility Countrywide will post losings in the 4th one-fourth of this twelvemonth and first one-fourth of 2008.

Quarterly losings would be tied to additional writedowns and expected additions in loan-loss commissariat in the approaching quarter, Craig Emrick, a frailty president on Moody's U.S. banking team, said during a conference call.

Moody's did not state it would take down evaluations at Countrywide if the loaner encountered future quarterly losses. It did however state it would reexamine how those losings impact working capital ratios to guarantee the depository financial institution is maintaining adequate liquidity.

As of now, Moody's said it makes not anticipate future losings "significantly impairing capital," based on emphasis diagnostic test scenarios Moody's usages to reexamine recognition ratings.

On Monday, Moody's reaffirmed its recognition evaluations for Countrywide, though it kept a negative mentality on the lender.

___

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Countrywide Financial:

MGIC, PMI Surge After Old Republic Becomes Top Holder (Update3)

MGIC Investing Corp. and PMI Group
Inc., the two greatest U.S. mortgage insurers, rose in New York
trading after Old Democracy International Corp. disclosed it became
the biggest investor in each company.

Old Republic, the Chicago-based insurer, bought 15 percentage of
PMI's stock and 11 percentage of MGIC's, according to regulatory
filings today. PMI, based in Walnut Creek, California, rose the
most since the company went public in 1995, surging $3.77, or 34
percent, to $14.88.

Mortgage insurers, which protect loaners against homeowner
default, plunged as the worst lodging slack in 16 old age deepened in
the 3rd quarter, leading to enter foreclosures and losings for
MGIC and PMI. The industry should be profitable in 2010, said Al
Zucaro, the head executive director military officer of Old Republic, which have the
sixth-largest U.S. mortgage insurer.

''They certainly cognize the mortgage coverage concern because
of their Democracy Mortgage subsidiary,'' Toilet Gwynn, an analyst at
Morgan Keegan Inc. inch Memphis, Tennessee, said in an interview. ''Zucaro is one of the most well-thought-of coverage directors in the
country.'' Gywn rates Old Democracy stock ''market perform.''

Old Democracy rose the most in five years, gaining 90 cents or
6.4 percent, to $15.07 in New House Of York Stock Exchange composite
trading. Milwaukee-based MGIC, the biggest mortgage insurer,
climbed $2.94, or 16 percent, to $21.30.

''We believe we cognize a couple things about the mortgage guaranty
business,'' Zucaro said in an interview. ''The recent marketplace value
of these pillory is substantially below what we anticipate in a few
years.''

MGIC and PMI each lost more than than 65 percentage of their market
value this year.

Gross Gains

Mortgage insurance companies are selling more than insurance as loaners seek to
lower their hazard and do their loans more attractive to investors. Members of Washington-based trade grouping Mortgage Insurance
Companies of America, including PMI, MGIC and Republic, issued
policies to 151,355 householders in September, 59 percentage more than a
year earlier.

Still, the figure of insured borrowers in the U.S. falling
more than 60 years behind on their payments climbed 22 percentage to
54,699, according to the group.

PMI's third-quarter premium gross rose 20 percentage to $256.8
million as the figure and size of loans it insured increased. The
company had a nett loss of $86.8 million, its first ever as a
publicly traded company, as claims costs increased fivefold. MGIC's
loss was $372.5 million as costs to bail out loaners tripled and
the company said it didn't anticipate to be profitable in 2008. Premium
revenue rose 8.4 percentage to $321 million.

'Choppy Waters'

''We anticipate to be navigating some pretty choppy Waters over
the adjacent couple of years,'' said Zucaro, 68. ''You shouldn't be in
the coverage concern unless you have got a 5-to-10 twelvemonth horizon.''

Old Democracy got about 39 percentage of its pretax net income from
mortgage coverage and 13 percentage from statute title coverage over the
past five years, according to the company Web site.

Net income tumbled 75 percentage to $29.2 million in the third
quarter from a twelvemonth earlier, led by losings in the mortgage and
title guarantee businesses. Premium gross from mortgage insurance
rose 21 percentage to $133.9 million.

Old Democracy lost 35 percentage of its marketplace value this year.

The shares of MGIC and PMI were purchased ''strictly as
passive investments'' and not to act upon the companies or take
control of them, Old Democracy said in a filing. The retentions were
obtained in the unfastened marketplace over the past 11 weeks, the company
said.

MGIC spokeswoman Katie Monfre declined to comment. PMI
spokeswoman Beth Haiken didn't go back a phone call seeking comment.

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