Both MBIA Inc. and Ambac Financial Group, the holding companies for two of the market's largest bond insurers, released details of their first-quarter business activities in an effort to communicate with the market and assuage worried investors.

In a letter to shareholders Tuesday, MBIA chief executive officer Jay Brown said the company has not yet deployed the $1.1 billion in capital it raised for the bond insurer, MBIA Insurance Corp., and that it will choose to wait until it has determined the best legal and operating structure for the insurance company and "achieved a stable target capitalization level."

Both MBIA and Ambac have raised additional capital over the last few months to support their triple-A ratings. Ambac, parent of Ambac Assurance Corp., Tuesday declared a quarterly dividend of one cent which will be paid to shareholders on June 4.

Both bond insurers said they have had a good amount of business through wrapping bonds in the secondary market. In its own activity update Tuesday, Ambac said the majority of its business came in the secondary market, where it insured 21 transactions so far this year.

"We have been increasingly active in the secondary market as select investors have taken advantage of the value of the Ambac guarantee," the company said in its release.

However, the future business prospects and financial results of both companies are dependant on the state of the mortgage markets, and the degree to which they continue to deteriorate. MBIA expects liquidity to return to the credit markets throughout 2008.

"The United States housing price decline will stabilize by mid- to-late 2009 at a level of about 10% to 15% below today's value," Brown said in his letter.

Lastly, MBIA responded to widely published reports this past weekend that Warren Buffett - whose bond insurer Berkshire Hathaway Assurance Corp. has taken market share from both MBIA and Ambac - said the tarnished bond insurers should not be triple-A and are not being viewed as triple-A by the debt markets.

"His observations that the equity and debt markets are not uniformly viewing bond insurers like MBIA as triple-A is of course accurate," Brown wrote.


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