I have been investing in MBIA since 2009 and posting on this board for quite a while.
I don't know much about the company or It's direction. Talking and posting has become more of a habit than a worthwhile purpose.
In other words, it just doesn't matter. Good luck to everyone.
My email remains open.
See mbia sec 8-k dated february 13, 2014 for explanation of how normura commutation will be described on q4 2013 financials.
However, depending on the speed of the possible upgrade, the fair adjustments might have a diminished effect.
The Nomura commutation will have a significant affect on book value.
No problem, a realistical expectation for Q4 2013 profits is better in the long-run and short-term too for everyone. In addition, a once over of the positive expectations from "Normura Commutation" doesn't hurt either and, it won't be the last as speculation is running rampant.
tony27719, here's some relevant info for your question: In Q2 2013 MBIA had $11.6 billion in commutations from BofA and Societe Generale, they resulted in about $200 million in realized losses.
In the event of a loss on the MBIA P and L, the major point to surmise from the "Normura Commutation" is MBIA eliminated a significant source of volatility and risk to future earnings and improved the risk profile of MBIA Inc as follows:
1. While using cash resources to retire insurance policies that may have resulted in claims in the future, possibly earning an upgrade.
2. Nat'l Public Finance has less of a chance of being tapped for cash to support MBIA Corp operations in the future, possibly earning an upgrade for the Mini-bond unit.
3. MBIA can petition New York Finance and Insurance regulator for a release of contingency capital due to a reduction in net par outstanding.
Depending on the "fair market" value of the policies, MBIA could show a profit or a loss on the Normura commutation of policies. Example:
if the policies were originally rated A and subsequently deteriorated in value based on performance to B due to a large component of reduced cash flow that resulted in the payment through commutation exceeding the fair market value, MBIA will show a loss. However, if the fair market carrying value exceeded the payment, MBIA will show a gain from the commutation of the
Normura insurance policies.
The gain or loss from the commutation will affect the net worth of MBIA. The change in net worth will be in the millions, not in the billions.
S&P upgraded a large number of AGO's Structured Notes to AA- based on performance and outlook. MBIA should also benefit from an improved environment for those same types(Structured Finance) of insurance policies.
See Nasdaq insitutional ownership for line item details.
S&P should head back toward 1817.