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Assured Guaranty Ltd. Message Board

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  • gregdines gregdines Mar 29, 2010 10:29 PM Flag

    Adjusted Book Value = $19.12 or $48.40?

    I've been waiting for someone to jump on my hurriedly written response, however investment income would make up for the gap anyway... Present value of AGO's future cashflows are a lot more complicated than either of us described, and I wasn't citing a discounted present value with my estimate, but rather future earnings in general.

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    • This was a little nitpicky. Sorry about that.

      Assured has managed itself far better than the other monolines, and deserves a lot of credit for this. However, there is a good reason for a healthy discount to adjusted book value. As an example, if the bonds that Assured has wrapped experience annualized credit losses of 5% per year for below investment grade credits, and 25 basis points per year for everything else, it will crush shareholder value.

25.65+0.28(+1.10%)10:50 AMEDT