Security Capital Assurance has reported a net loss of $1.2 billion for the fourth quarter of 2007, compared to a net income of $35.8 million in the corresponding quarter of 2006.
For the quarter, the company had an operating loss of $678.1 million, or $10.57 per share, compared to operating income of $37.1 million, or $0.58 per share for the same quarter in 2006. Net investment income for the period was $32.7 million, representing an increase of 32% from $24.7 million in the comparable period of 2006.
For the full-year 2007, the company reported a net loss of $1.22 billion compared to a net income of $117.4 million in 2006. Operating loss for the year was $530.3 million, or $8.27 per share, compared to operating income of $141.9 million, or $2.64 per share in 2006.
The fourth quarter and full-year 2007 operating losses were primarily due to the $651.5 million net case loss provision associated with the collateralized debt obligations of ABS portfolio and the $37.2 million net case loss provision that was incurred during the fourth quarter for home equity line of credit and CES transactions.
Paul Giordano, president and CEO of Security Capital Assurance, said: The extraordinary and rapid deterioration in US residential mortgage-related credits led us to incur record levels of case reserves in the fourth quarter of last year.