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MBIA Inc. Message Board

  • nilsdegraaf nilsdegraaf Apr 15, 2011 10:15 AM Flag

    BAC-AGO

    Interesting to see that BAC was prepared to take back 80% of the loans in the first lien deals.


    From the AGO announcement:

    The settlement agreement includes a payment of $1.1 billion to Assured Guaranty as well as a loss-sharing reinsurance arrangement on 21 first lien RMBS transactions. The settlement covers all Bank of America or Countrywide-sponsored securitizations, as well as certain other securitizations containing concentrations of Countrywide-originated loans, that Assured Guaranty has insured on a primary basis.

    The settled transactions have a gross par outstanding of $5.2 billion ($4.8 billion net par outstanding) as of December 31, ..., and consists of 8 second lien securitizations and 21 first lien securitizations.

    "...This settlement significantly strengthens our balance sheet..."

    The cash settlement of $1.1 billion will be paid in full by March 31, 2012. ... In addition, Bank of America and Countrywide have agreed to a reinsurance arrangement that will reimburse Assured Guaranty for 80% of all paid losses on the 21 first lien RMBS transactions ... . As of December 31, 2010, Assured Guaranty's gross economic loss on these RMBS transactions, which assumes cumulative projected collateral losses of $4.6 billion, was $490 million. The total estimated value of the settlement is expected to be accretive to shareholders' equity and adjusted book value, a non-GAAP financial measure.



    sources:
    http://www.assuredguaranty.com/Documents/AGO_Fixed_Income_Investor_Presentation_4Q10_v032111vFINAL.pdf
    http://www.assuredguaranty.com/news/article.aspx?id=1550869

 
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