Tim Travis
Long only, deep value, registered investment advisor, portfolio strategy

Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge

Few industries have faced the adversity that bond insurance companies have since the financial crisis. The surviving entities have endured a confluence of ratings downgrades and lawsuits, while low interest rates and ratings uncertainty has crimped demand for the insurance. Before looking forward, it is important to look back at why the industry does indeed play an important role in the financial markets. In 1980, only 3% of bond issues were insured compared to approximately 60% in 2007. In 2007, there were seven insurers rated AAA, while today there are none. Bond insurance allows lower-rated municipalities to obtain lower financing costs, while the insurance also provides interest and principal payments to bondholders' in the rare event that a municipal credit...

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