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AMER OVERSEAS GP LTD Message Board

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  • girthner21 girthner21 Jul 20, 2009 8:24 PM Flag

    Q1 Discussion Thread - FWIW

    Agreed, not much in there. Only .07/share loss, seems to bode well as that included the Ambac garbage. I liked the following section of info provided:

    "Included in the Company’s March 31, 2009, U.S. GAAP balance sheet, are balances pertaining to our assumed business from Ambac as follows:

    * Reinsurance balances receivable of $63.9 million
    * Deferred policy acquisition costs of $49.9 million
    * Unearned premiums of $155.5 million
    * Loss and loss expense reserves of $65.3 million

    The effect of the above transaction related to the Ambac Commutation Agreement, which will be recorded by RAM in the quarter ending June 30, 2009, is estimated to be a gain to net income of $8.7 million. There can be no assurance that RAM’s assumptions will not differ materially from the ultimate treatment or impact of the aforementioned transactions."

    I am as hopeful now as ever regarding the potential value in this stock.

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    • Cheers. $65 mm reserve drawdown due to commutation payment leaves us with net of about that amount ($65mm) as FAS 163 eliminated unallocated reserves and changed the reserving methodology.

      whether Assured & FSA can successfully remediate their 2nd-lien RMBS exposures is now the most critical thing for RAM, save the success of the preferred buybacks and their ability to successfully dispute cessions from the primaries.

      If you look at the RMBS exposure summary on the website, which lists all the various deals, facultative/treaty etc. You'll see that some deals are enormous -- $114 mm HELOC deal, for example, is about 1/3 of total 2nd-lien exposure.

      I'm almost positive that is the Countrywide HELOC wrapped in 2005 (or possibly 2007 -- even worse) by Assured. That is an ugly piece of trash that scares me, and if for example they successfully disputed the cession and returned the UPR to AGO, would be fantastic.

      Cheers and thanks for input. I look forward to valu, kickn & others if they get a chance.