NEW YORK, Aug 7 (Reuters) - Bond insurer Ambac Financial Group on Friday reported a second-quarter loss of $2.4 billion, hurt by the deteriorating credit quality of mortgage bonds it insured, and its shares fell 21 percent.
Its net loss ballooned to $8.33 a share, from a profit of $2.80 a share a year earlier.
Credit costs and losses soared to $1.2 billion, the company said, largely on instruments linked to residential mortgages.
Ambac warned July 27 that it had $1.6 billion of new losses from derivatives at its main operating unit. The company also said that it would stop paying interest on some subordinated debt and dividends on some preferred shares to save cash.
The New York-based bond insurer and its larger rival MBIA Inc have struggled to get new business after crippling losses from risky mortgage securities and being stripped of their triple-A ratings.
Ambac shares fell 29 cents to $1.09 in premarket trading on Friday. The shares had climbed to $1.38 on Thursday from 76 cents at the start of the week, amid a broad rally of beaten-down financial stocks.
(Reporting by Elinor Comlay; Editing by Derek Caney and Steve Orlofsky) Keywords: AMBAC/ (elinor.comlay@thomsonreuters.com; +1 646 223 6116) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Its net loss ballooned to $8.33 a share, from a profit of $2.80 a share a year earlier.
Credit costs and losses soared to $1.2 billion, the company said, largely on instruments linked to residential mortgages.
Ambac warned July 27 that it had $1.6 billion of new losses from derivatives at its main operating unit. The company also said that it would stop paying interest on some subordinated debt and dividends on some preferred shares to save cash.
The New York-based bond insurer and its larger rival MBIA Inc have struggled to get new business after crippling losses from risky mortgage securities and being stripped of their triple-A ratings.
Ambac shares fell 29 cents to $1.09 in premarket trading on Friday. The shares had climbed to $1.38 on Thursday from 76 cents at the start of the week, amid a broad rally of beaten-down financial stocks.
(Reporting by Elinor Comlay; Editing by Derek Caney and Steve Orlofsky) Keywords: AMBAC/ (elinor.comlay@thomsonreuters.com; +1 646 223 6116) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.