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Assured Guaranty Ltd. Message Board

  • hounddawgie hounddawgie Apr 12, 2010 8:35 PM Flag

    Major or minor obstacle for AGO?

    As you might hear from a business school prof, "how should AGO address public entity's tendency to borrow short term to meet budget short falls instead of issuing bonds?". Will AGO's product offerings be more popular as interest rates rise? Are bond wrappers on their way out?

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    • The city of Harrisburg is about to find out whether the insured debt is worth it.....

      • 2 Replies to jimpersonett
      • By the way, I don't own any Harrisburg bonds but I have certainly noticed them. There are a ton for sale and the only ones that are pricing "normal" along the yield curve are insured by AGM.

        FWIW, I've been shopping munis quite a bit. Recently, I decided to research the claims paying capabilities of the insurers that I frequently see on muni bonds. When I complete my research I'll post here.

        The one thing that stands out without doing much research is that AGO stands alone amongst muni insurers. You can find plenty of occurrences where the same issuer has the same (or nearly same) maturity bond pricing at dramatic spreads. The difference? AGO/AGM insurance versus any other insurer's guaranty.

        Some of the insurers guaranty's are clearly assumed to be worthless by muni investors. I see cases where the same issuer with the same maturity (or close) bonds are trading at essentially a zero spread with or without insurance. This of course means, the insurance has zero or near zero value.

        Interesting times.

      • Jim:

        Good to hear from you again.

        I assume you mean Harrisburg, PA? Correct?

        I've been shopping the muni bond market quite a bit. My tax bracket is getting too high and late last year I started moving into munis. I have noticed that Harrisburg, PA has lots of munis zeros with near term maturities that are not priced well. Please point me to any relevant information you may have.

        Thanks,

        Jay

 
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