- The monolines were sent lower earlier today as the WSJ reported new Puerto Rican Governor Ricardo Rossello - previously viewed as a friend to creditors - as considering a renegotiation of the $9B agreement reached on Prepa debt in 2015.
- That deal had been viewed as a roadmap for restructuring the rest of the island's debt, but those hopes could now be dwindling.
- MKM's Harry Fong isn't worried, and says the deal will be completed as currently written. He notes creditors have made new short term loans to Prepa, thus indicating their willingness, and Prepa wants to get restructuring over with so it can improve its operations.
- Fong rates MBIA (NYSE:MBI) a Buy with $15 price target (roughly 40% upside). Down 2.8% at the moment, it's well off of its session low.
- Also off their lows: Ambac (AMBC -1.5%) and Assured Guaranty (AGO -1%).