Bond insurers and mortgage insurers, which have taken big hits over the
past year due to their wraps of toxic mortgages and soured mortgage-backed securities, got a boost Thursday on reports that Citigroup Inc.
signed onto a deal with Senate Democrats that would allow bankruptcy
judges to set new repayment terms for holders of mortgages. Might this
be a step in the right direction toward lowering default rates? Bond
insurance and mortgage insurance shareholders appear to believe so.
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The largest U.S. bond insurer, MBIA Inc., while nowhere near its
$13.98 closing price a year ago, closed up 11.53% to $5.61 per share.
It's biggest competitor, Ambac Financial Group Inc., gained 13.43%
Thursday to close at $1.52 per share, a mere shadow of its $19.56
closing price a year ago.
Mortgage insurer PMI Group Inc. gained 19.47%
to close at $2.70 per share. Triad Guaranty Inc. climbed 11.76% to
close at 76 cents per share. Mortgage insurer Triad in mid-June
announced it had ended talks with private equity firm Lightyear Capital
LLC to form a new home mortgage insurer and said it would stop booking
new business and go into run-off, effective July 15.
Among Deal Stocks, Thinkorswim Group Inc. skyrocketed 47.61% to close
at $8.34 per share as online brokerage TD Ameritrade Holding Inc. on
Thursday agreed to acquire the retail brokerage for about $606 million
in cash and stock.
Meanwhile,
billionaire super market magnate and sometimes activist investor Ron
Burkle of Yucaipa Cos. gave Whole Foods Market Inc. a big lift when he
disclosed a 7% stake in the company Thursday through an SEC filing.
Others followed his lead, driving its shares up to close at
$12.27. - Michael Rudnick
