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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In a runoff scenario, we do not believe that the bond insurers will generate sufficient taxable aa to offset the net operating losses generated by paid losses.

Languages Deutsch Edit links. From Wikipedia, the free encyclopedia. MBIA is a monoline insurer primarily of municipal bonds and on asset-backed securities and mortgage-backed securities. National Public Finance Guarantee to A3″.

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

Can this possibly make sense? Captive reinsurers whose ratings are not regularly updated offer the potential for abuse. We believe that the bond insurers and the rating agencies do not adequately consider the facts that: He says his dad called off the wager the morning of the test for fear he would lose the bet, though Ackman ended up scoring wrong on one answer.

As usual, I will make myself aa at your convenience. Todd Sullivan’s – ValuePlays. You should adjust your estimate of CPR for each insurer to reflect the above factors in order to accurately establish the capital available to mbiz claims. You should receive adkman 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.

A consortium of insurance companies AetnaFireman’s XaaTravelersCignaand Continental formed the Municipal Bond Insurance Association in to diversify their holdings in municipal bonds. He was charged copying fees for copyingpages of statements regarding the financial services company, in his law firm’s compliance with a subpoena. They are persistent about important things.

We believe that both MBIA and Ambac have substantial collateral posting obligations in the event of a holding company downgrade. Lastly I encourage you to ask yourself the following question while looking at your image in the mirror: While some commentators have suggested that this might create a pricing umbrella that will benefit the existing bond insurers, this is demonstrably false.


Gotham made a profit selling aa stake in the property to Goldman, Ackman says. Unfortunately, however, your previous ratings assessments have erred materially in their omission of certain critical analysis and aciman inclusion of outright errors in your work.

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

Archived from the original on February 27, Chuck Chaplin, MBIA’s chief financial officer, says in an interview that Ackman’s criticism reflects misperceptions of the bond insurer’s business. It also provides a fixed-income asset management service with about forty billion dollars under management. Call ackmsn divide not viable”.

The bond insurers include these guarantees in calculating the weighted average ratings of their investment portfolios. 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.

When MBIA did, in fact, crash as the financial crisis of came to a head, he sold the swaps for a large profit.

He posted a list of mbka securities the two companies guaranteed on the Internet, along with a model supplied by an unnamed investment bank, so investors could do their own forecasts of akcman the insurers might lose.

Because Berkshire Hathaway already possesses a real Triple A rating, the bonds that are wrapped with aaa guarantee will trade with a tighter spread when compared to a bond qaa by a traditional bond insurer, even one without legacy structured finance exposure. Ackman reportedly attempted to warn regulators, rating agencies and investors about the bond insurers’ high risk business models.

Marty Whitman can call him what he wants, but the guy knows his stuff.

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

The liquidity risks of these programs mgia the underlying assets should be carefully examined. Retrieved November 2, 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. For all of the above reasons, we believe that the present value of future premiums should not be included in CPR. In the MBIA documents, Ackman says he saw that the insurer was guaranteeing untested asset-backed securities. As you well know, we have privately, in meetings and correspondence with you, and publicly in various presentations that we have made, called into question your ratings of the bond insurance industry, in particular, the ratings for MBIA Insurance Corp.


In the mids, Gotham tried to buy Rockefeller Center. Various MTM programs also create liquidity risk as assets may have aaw be sold to meet redeeming bondholders. The independent research firm CreditSights Inc. The company went public in Mboa San Francisco Chronicle. 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. The SEC later started its own probe.

The impact of the loss of these facilities is material to the liquidity profile of the holding companies and their insurance subsidiaries and must axkman considered in your credit assessment. As you well know, depression lines of credit can only be drawn to pay claims on municipal obligations and only after a substantial deductible. PurchaseNew York. 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.

It was founded in as the Municipal Bond Insurance Association. That is, you reduce their credit exposure by those exposures that have been reinsured. Bond Insurer Ratings Ladies and Gentlemen: His law firm charged him for copyingpages of financial statements and other documents, ackmn, of them about MBIA, to comply with a subpoena.