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Assured Guaranty Ltd. Message Board

  • white_sox_curse white_sox_curse Sep 28, 2011 5:26 PM Flag

    Two questions

    1) Can AGO management complete all those 'significant concentration risk' issues in 60 days?

    2) They may have to insure $1 billion of new Jefferson Cnty debt. Will that create more capital reserve problems under S&P criteria?

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    • If you are serious than go to the AGO web site and listen to the KBW presentation. The CEO changed the late August presentation to address the S&P criteria. The bottom line is that S&P is very unrealistic with the new criteria.For example the marks they want AGO to take on GO muni's (where there has never been a default) are crazy. However AGO outlined several steps they are taking to address this new criteria. One step they will not pursue is a capital raise. They point out they feel that their intrinsic value(Adjusted book value) is $49.23 vs. market price of $11 is way too far away to make this a reasoable option. They also show what a hypothetical $1 billion hit would do to ABV. See chart on page 18 where ABV goes from $49.23 down to $45.16. Bear in mind that the Jefferson County has been reserved for in the above numbers. Will they resolve the S&P issues who knows. They are saying they are working to that end. If they do not they will most likely go to plan B and that would mean puting the company into runoff or taking the company private. In either case we as shareholders should see a much higher stock price.The insider's obviously believe there is plenty of value here since they bought $18 million worth of AGO stock a few weeks ago.

 
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