XL to report $1bn Q3 losses
by David Masters
Story link: XL to report $1bn Q3 losses
Bermuda-based XL capital has said that it will report third-quarter investment losses of between $1 billion and $1.2 billion later this month.
The announcement came one day after the company’s stock plummeted to its lowest level since 1991 at $4.01 per share.
Analysts say that the loss is due to XL’s large exposure to mortgage and asset backed bonds. Together, these make up 32% of XL’s $34.3 billion fixed investment income portfolio.
In September XL revealed that it held $115 million in equity and debt of the bankrupt Lehman Brother’s Inc, Washington Mutual Inc, Fannie Mae and Freddie Mac.
The strong US dollar has also weakened the book value of XL’s shares.
Book value per share as of September 30th is expected to be between $21 and $22.50 per share on a full diluted basis.
CEO Michael McGavick said the company is ‘determined’ to offer investors all the information they need to work out the true value of XL’s shares.
He added that additional information about XL’s finances will be provided later this week.