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Assured Guaranty Ltd. Message Board

  • valueguy66 valueguy66 Apr 4, 2012 8:12 AM Flag

    Moody's is on a tear !!!!

    Now they are downgrading GE. They are saying there are risks with GE Capital. GE spent the last three years cleaning up GE Capital and it is now running on all 8 cylinders. Where was Moody's and S&P prior to the meltdown. Can we take them seriously ???

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    • Unfortunately the muni's sort of have to take them seriously. It's a bit of a self-fulfilling prophecy. If the ratings agencies downgrade the bond insurer, that insurer may not be able to insure good quality bonds, which causes the insurer to lose revenue and become a credit risk even if it wasn't before.

      The thing is though that AGO is pretty much the last game in town for muni bond issuers. Should be interesting to see how this plays out.

      • 1 Reply to get_imaginary
      • I am aware of that. My actual investment thesis was that Dominic would put AGO into run off . This way AGO can do share buybacks way below adjusted book (which is north of $45) and pursue their put back claims. This would drive the ultimate liquidation proceeds way higher without all the aggravation. In the several conference calls I listened to this question always comes up. Dominic say's that he struggles with this runoff decision all the time. The one thing I am pretty certain about is that they will not do a capital raise to satisfy the ratings agency's. In fact they did the oppositie and did sharebuybacks in 2011 while still under review from S&P. Why dance around with these jerks.

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