Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Bijan Moazami with Friedman, Billings, Ramsey & Co.
Bijan Moazami - Friedman, Billings, Ramsey & Co.
I have a number of questions. First, Ron, do you have any reserve releases this quarter?
Ronald E. Pipoly, Jr.
No, we did not.
Bijan Moazami - Friedman, Billings, Ramsey & Co.
No reserve releases. Could you quantify a little bit the impact of foreign exchange on your book value and the way you performed during the quarter?
Ronald E. Pipoly, Jr.
On a quarterly basis, the effect of foreign currency on our other comprehensive income position was approximately $0.17 on OCI for the quarter. It was about $0.20 on a year-to-date basis.
Bijan Moazami - Friedman, Billings, Ramsey & Co.
I was wondering if Barry could make a few comments about the bond market and what you’ve been seeing so far this year and what we should be expecting the bond portfolio to do or to be composed of going into 2009.
Barry D. Zyskind
From what we’re seeing at least on our bond portfolio, as I mentioned, we saw stability between September 30 and December 31 where the bonds stayed in a very tight range. So far the beginning of this year, we’ve seen some of the unrealized losses from last year started to come back and what you see in the papers are happening, spreads are narrowing and people are starting to be able to go out to the bond market again.
Some of the lower rated bonds obviously yields are significant but overall we’re seeing that on our portfolio which as we mentioned is 61% AAA and 91% A, we’re seeing a very, very nice turnaround and that’s why we believe as things stabilize and continue to get better, our book value will grow in excess of our earnings going forward, especially now that equity is 2% and we have no intention of increasing the equity as part of the portfolio and we feel very good that the portfolio is in very good position and will allow us to have really a very solid balance sheet.
Bijan Moazami - Friedman, Billings, Ramsey & Co.
Where are you guys putting new money?
Barry D. Zyskind
We’re seeing some opportunities. We continue to put in the bond market. We keep a nice amount of cash on hand but we’re seeing some opportunities in some of the corporates, industrials, spreading them around. We’re seeing nice yield that we think overall in terms of earnings will help the earnings power of the company and at the same time, well-diversified and with good credit ratings.
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