- MBIA (MBI -6.3%) is sharply lower following Warburg Pincus' sale of 27.25M shares of its stake. Prior to the sale, the P-E firm held 47.5M shares, or 26.2% of MBIA's float. BTIG's bullish Mark Palmer notes the MBIA holding represents the final position for Warburg in a fund raised in 2007.
- Given its strong capital position, MBIA's National Public Finance unit is buying 8M shares of the offering. For accounting purposes, the shares are considered retired, and Palmer estimates the purchase will lift adjusted book value per share by $0.80 to $26.75.
- He reiterates a Buy rating with $13 price target based on about 0.50x that ABV.
- Previously: Warburg Pincus unloading slug of MBIA stake (May 18)