MBIA Posts $2.4B Loss In 1Q; Shares Tumble By 5.5%

New York, NY (AHN) - MBIA Inc. posted on Monday a loss of as much as $2.4 billion for the first quarter led by the decline in mortgage securities market.

The bond insurer, whose market value tumbled 87 percent in the past year, said that it is likely to pay more than $1 billion in additional claims.

Shares of the MBIA plunged by as much as 12 percent on early Monday to $8.30 to retreat at $8.91 around 8:00 a.m. in New York Stock Exchange composite trading after it posted loss of $13.03 a share after the company took a $3.6 billion on derivatives.

The stocks of the company were trading at $70 a dollar a year ago and $29.16 a share at Dec. 31.

"We're not out of the woods yet," Richard Larkin, senior vice president at Herbert J. Sims & Co. in Iselin, New Jersey, told Bloomberg News.

"I'm not sure AAA bond insurers will ever be viewed the same way as in the past," he added.

The troubled bond insurer reported higher loss in the quarter ending March 31 compared to its profit of $199 million, or $1.46 a share a year ago during the same period.

The financial firm, which declined for the third straight time, had been expected a lose of $1.46 a share.

However, MBIA's Chairman and CEO, Jay Brown, added that company doesn't need new capital to improve its balance sheet and alerted its shareholders that MBIA was not able derive a valuation for the insured credit default swap portfolio.

"I can tell you with great certainty that no two people could ever agree on this calculation," he wrote in a statement, according to Fortune.

"so don't be surprised when external sources propose wildly different possibilities for MBIA."

MBIA struggled to retain its AAA credit ratings after it posted losses in the quarter prior to the current one.

The firm raised as much as $2.6 billion in new capital this year to retain its AAA ratings from Moody's Investors Service and Standard & Poor's.

However, the company couldn't maintain triple-A rating for one of its major insurance unit from Fitch Ratings.