- Its deja vu all over again for MBIA (MBI +1.9%), which yesterday took a hit for the nth time since 2013 over concern with its exposure to the Zohar II CLO.
- BTIG's Mark Palmer again points out that no matter what happens to Zohar, or to MBIA Insurance - the unit in which the CLOs are housed - "it will have no impact whatsoever" on the value of MBIA's common stock.
- In calculating his $13 PT for MBIA, Palmer has already ascribed zero value for MBIA Insurance. The market may be factoring in negative value, but even in a situation where regulators seize the unit, there would be no cross default with any holding company debt.
- Previously: MBIA off sharply; KBW sees material risks (April 25)