- Noting about $2.6B of excess capital above the amount required by S&P to maintain a AAA level, BTIG's Mark Palmer thinks Assured Guaranty (AGO +1%) is well-positioned to be greenlighted by the NY Department of Financial Services for a special dividend from the operating subsidiaries to the parent.
- That money would allow the company to continue with its robust buyback program at prices of just about 50% of adjusted book value.
- There's also the strong gain in interest rates of late, and that could mean better prospects for the municipal bond insurance business.
- The new $41 price target (from $37) is based on 0.60x estimated year-end 2017 adjusted book value of $72.16, minus $4.37 for the estimated impact of Puerto Rico losses. It's also about 17% upside from the current price.