AGO currently does not have the capital to accept ABK's book of muni-insurance. However, if all goes well in the economy and the risks associated with muni debt subsides, AGO could find itself with excess capital. Then AGO would be in a position to recieve ABK's muni debt guarantees. It is likely to be an 'all or none' deal that AGO would be in a great position to get for a very good price.
I would really hate to see AGO do another capital raise here at $20/share. Put the stock at $40/share and I would say, "deal on".