And it’s not just the fact of MBIA’s triple-A rating that drives Mr. Ackman batty; it’s its transcendent importance to the company’s business. As Gary. Following New York and U.S. probes of his trading and reports, Ackman persisted in challenging MBIA’s AAA credit rating for more than five. That AAA rating being essential to MBIA staying afloat as a bond insurer. Later on Thursday, Bill Ackman, of Pershing Square – the massively.

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By using this site, you agree to the Terms of Use and Privacy Policy. You should also carefully calculate the impact of a downgrade of the bonds held by one bond insurer that are guaranteed by other insurers in your calculation of capital adequacy.

Ackman reportedly attempted to warn regulators, rating agencies and investors about the bond insurers’ high risk business models. Moody’s upgrades the ratings of MBIA group: In the mids, Gotham tried to buy Rockefeller Center. When MBIA did, in fact, crash ix the financial crisis of came to a head, he sold the swaps for a large profit.

Ackman Devoured , Pages to Prove “MBIA was never AAA”

Ackman may soon be proved right. From Mgia, the free encyclopedia. Retrieved November 2, We believe that both MBIA and Ambac have substantial collateral posting obligations in the event of a holding company downgrade.

The independent research firm CreditSights Inc. Retrieved February 26, MBI Russell Component.

Ackman’s Letter to Moody’s: A Must Read

He disputes Ackman’s estimates of MBIA’s losses and says the trader is benefiting ackmzn from lucky timing than smart analysis. The combination of volatility in each of these markets and the increased collateral demands required in holding company downgrade scenarios will put a severe strain on holding company liquidity.


Archived from the original on February 27, Fitch Ratings 99 Church St. National Public Finance Guarantee to A3″. Webarchive template wayback links. Ackman aaa undergraduate and business degrees from Harvard.

Financial insurance or Financial Guarantees are acckman form of credit enhancement. During the talks, Ackman, then 28, says he got a call from Donald Trump. Bond Insurer Ratings Ladies and Gentlemen: He was charged copying nbia for copyingpages of statements regarding the financial services company, in his law firm’s compliance with a subpoena. In the MBIA documents, Ackman says he saw aclman the insurer was guaranteeing untested asset-backed securities.

While the rating agencies have not updated their credit ratings of Ram Re, the market appears to have already done so. This is best understood by example. That is, you reduce their credit exposure by those exposures that have been reinsured. Each of you, according to your recent public statements, is in various stages of updating your ratings ackmwn the bond insurers. Captive reinsurers whose ratings are not regularly updated offer the potential for abuse. A bond insurer is only able to obtain tax benefits if the insurer is a going concern and is able to generate sufficient taxable income in the current iss future years to offset the losses from paid insurance claims.

The letter arrived only after he wrote to the SEC chairman and the agency’s four commissioners demanding it. The bond insurers include these guarantees in calculating the weighted average ratings of their investment portfolios. Inas the New York attorney general’s probe was under way, Ackman fired off a memo to MBIA posing questions he says the company never answered. Ackman peppered rating companies and regulators with letters, e-mails and presentations criticizing MBIA’s credit rating.


MBIA – Wikipedia

Substantially all of these premiums are from structured finance guarantees. We believe a shareholder vote and approved registration statement will likely be required in such a circumstance, delaying the ability to consummate the transaction beyond the March 31st Warburg backstop drop dead date. Insurance claims must be paid in cash. PurchaseNew York.

Net operating loss carryforwards are not cash and are not available to pay claims and should therefore not be deducted from losses in calculating bond insurer capital adequacy. You should receive assurances from MBIA and require it to contribute the full billion dollars to its insurance subsidiaries before you include the funds in calculating insurance company capital.

In that the losses are occurring primarily on structured finance obligations, these lines of credit should not be included in CPR The Capital Base included in CPR is also likely to be overstated because the investment assets of the bond insurers consist primarily of bond insurer guaranteed obligations that are valued inclusive of the guarantee, when they should be valued on an unwrapped basis. People are obsessive about stupid things.