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Assured Guaranty Ltd. Message Board

  • sectrader33 sectrader33 Jul 2, 2009 9:39 PM Flag

    Question on delisting...

    I have a few questions. It's my understanding FSE, FSF, and FSB are being delisted. Principal and interest will continue to be paid, however. The securities won't trade on a national exchange.
    With this information,
    Will these securities trade on an OVER THE COUNTER exchange AND
    since the shares (bonds) no longer trade, will the respective owner's brokerage still deposit the "dividends" (more correctly interest payments) into the brokerage accounts of people owning these bonds--or will these bonds need to be actually registered in the name of the owner and the actual check be received at the owner's address....

    Intelligent responses welcome.

    No longer long this security, was thinking about getting back in but this may stop me--unless yields soar. I wouldn't mind being "locked in" to a very high yield...I just don't think there's enough time for that to happen. That said, there may be some people looking to exit on this news--just because of the fear of not being able to sell (that's assuming there's no other way to sell--OTC)

    I've made quite a bit on these securities and hate to see them go........ :(
    I guess I'll have to find another cow to milk....

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    • They will NOT be able to be bought or sold as they will not trade on any exchange. We won't be able to access our principal until 2100. I am selling before the 24th.

    • I would not worry too much about the upcoming delisting. I own one other retail bond and a REIT preferred that are also not listed. My broker (Fidelity) handles everything exactly that same as listed retail bonds and preferred stocks.

      For the AGO/FSA, I believe there will be only one difference. For listed stocks and bonds, when you place an order to buy or sell, you will see the current best bid and best ask. For pink sheet/gray market/non-listed securities you do not see a bid or ask and of course you also do not see the size of the best bid or the size of the best ask.

      If the AGO/FSA bonds were trading near par ($25), you would probably see a significant drop in price upon the delisting. However, given that FSB, FSE, and FSF are already trading well below par with a healthy current yield, I suspect that we will not see much of a price drop.

      Some investors (and particularly risk adverse investors) do not want to own a non-listed investment PERIOD and will sell upon first learning about the delisting news. I could get surprised but I don't think that will be the case with FSB, FSE, and FSF....again b/c we are already well below par and b/c the retail bonds already have very limited liquidity. I do not expect liquidity to get any worse upon delisting.

      The big question for me is.....why is AGO delisting the bonds? Is there some sort of cost savings? Bonds of companies that are taken private are often delisted b/c this relieves the private company of the obligation to continue with SEC filings. Unless AGO plans to go private that would not be the case with FSB, FSE, and FSF. Anyone have any ideas as to why AGO would delist the retail bonds? I may send an E-mail to AGO investor relations and ask why.

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