RAM reports $190m Q1 losses

by David Masters

Story link: RAM reports $190m Q1 losses

Bermuda-based insurance group RAM Holdings Ltd has reported its results for the first quarter, with a net loss of $189.5 million, or $6.95 per diluted share.

This is compared to a net profit of $14.3 million, or $0.52 per diluted share, for the first quarter of 2007.

The loss is being largely attributed to a decline in value of the credit derivatives reinsured by the company.

Mark-to-market losses on credit derivatives totalled $166.4 million. This was due to a change in fair value, including $12.4 million in credit impairments.

Furthermore, case basic loss reserves totalled $20.6 million, mainly as a result of poor performance in residential mortgage-backed securities (RMBS).

Unallocated loss reserves were $9.9 million, also associated with RMBS.

Because RAM insures debt obligations, it has been particularly hard hit by the residential mortgage crisis in the US.

CEO Vernon Endo said that the loss is ‘disappointing’ and that the company will continue to work to stabilise its ratings.