ACA may lose $34 billion on securities they guaranteed

U.S. bond insurers such as ACA may lose $34 billion on securities they guaranteed, Citigroup Global Markets said this month. They are likely to take losses of $32 billion on collateralized debt obligations backed partly by U.S. subprime mortgages, Citigroup said.ANZ had bought default protection on a portfolio of investment grade companies from ACA using a credit-default swap, a derivative used to speculate on corporate credit quality. After ACA was cut to non-investment grade, the bank was required to raise an ``individual provision'' of $200 million, it said.