Jul. 1, 2014, 3:36 PM
- Moody's downgrades Puerto Rico's GO bond rating by a big three notches to B2 from Ba2, and cut ratings on the commonwealth's other debt as well in wake of last week's passage of a law allowing public corporations to defer or reduce debt payments.
- "Puerto Rico’s new law marks the end of the commonwealth’s long history of taking actions needed to support its debt. It signals a depleted capacity for revenue increases and austerity measures, and a new preference for shifting fiscal pressures to creditors."
- MBIA (MBI -0.6%), Assured Guaranty (AGO -3.1%)
- Previously: U.S. firms take new Puerto Rico law to court
Jun. 30, 2014, 8:40 AM
- Puerto Rico lawmakers last week approved legislation allowing public corporations (such as the utility companies) to restructure their debt, and funds managed by Franklin Templeton and Oppenheimer have asked the U.S. District Court of Puerto Rico to block the move, arguing only Congress can create bankruptcy laws.
- Puerto Rico's move sent shudders through investors in its debt as well as through the investors of companies like MBIA (MBI) and Assured Guaranty (AGO) which insure the paper. MBIA slid 10% last week (it's off another 6% this morning as a longtime bull throws in the towel) and Assured Guaranty 6.5%.
- Government officials insist no restructuring is imminent and the island's Government Development Bank says last week's "Recovery Act" was designed to fill a gap in the existing bankruptcy laws and "ensure continuity of critical public services."
- Previously: MBIA and Assured slide on Puerto Rico reversal
Jun. 30, 2014, 8:12 AM
- Longtime bull Mark Palmer of BTIG pulls his Buy rating on MBIA (MBI), saying the share price is likely to be capped due to uncertainty over what now looks to be an imminent restructuring of the debt of the Puerto Rico Electric Authority.
- Shares - 2.5% premarket
- See also: Palmer assures on Assured amid Puerto Rico debt situation
- Previously: MBIA and Assured slide on Puerto Rico reversal
Jun. 25, 2014, 12:10 PM
- Reversing his previous position on the matter, Puerto Rico Governor Alejandro Garcia Padilla throws his support behind legislation which would allow certain public companies to restructure their debt.
- Public utilities such as the electric and water companies would be allowed to negotiate with creditors to ease their debt loads under the new law. Bulls on the situation in Puerto Rico have consistently pointed to the willingness of authorities to make good on the Commonwealth's debts.
- Yields on Puerto Rico Electric Power Authority bonds maturing in three years have spiked all the way to 22%.
- MBI -3.2%, AGO -2.4%
Jun. 4, 2014, 7:50 AM| 1 Comment
May 22, 2014, 9:07 AM
- Moody's becomes the latest to boost the credit rating of National Public Finance Guarantee, lifting its gauge to A3 from Baa1, and raising MBIA's (MBI) rating to Ba1 from Ba3.
- S&P raised its rating on National two months ago, and Kroll last week, so last night's ratings upgrade - while nice - is a bit behind the curve as MBIA has already begun gearing the unit up to begin insuring municipal debt once again.
May 12, 2014, 5:49 PM
May 12, 2014, 4:28 PM
- Adjusted pretax loss of $99M vs. $20M one year ago. Adjusted book value per share of $26.64 vs. $27.78 at the end of 2013.
- Noting today's AA+ rating for National Public Finance from Kroll, CFO Chuck Chaplin says the muni unit can now start insuring bonds again, and looks forward to writing new business.
- National Public Finance had $92M in pretax income in Q1 vs. $142M one year ago. Total premiums earned of $65M fell 37% Y/Y. No new business was written in Q1, but that's about to change.
- CC tomorrow at 8 ET
- Source: Press Release
- Previously: MBIA EPS of $1.32
- MBI +5.1% AH
May 12, 2014, 4:16 PM
May 12, 2014, 1:16 PM
- Efforts by MBIA (MBI +1.4%) to relaunch business at its municipal insurance unit get a boost after Kroll Bond Rating Agency awards an AA+ credit rating to National Public Finance Guarantee. Kroll cites National's experienced management team, underwriting standards, and earnings flexibility.
- Kroll's rating is two notches above that of S&P which boosted National to AA- about two months ago.
May 11, 2014, 5:35 PM
May 8, 2014, 3:22 PM
- There is no evidence MBIA (MBI -1.6%) relied on an allegedly altered due diligence report for a pool of Bear Stearns underwritten mortgages, says a NY Supreme Court justice, dismissing the bond insurer's lawsuit against JPMorgan over $1.16B in MBS.
- This may not be the total loss for MBIA the market seems to think it is, says BTIG's Mark Palmer. Of note is the judge saying MBIA is free to revise its complaint and refile the case.
Apr. 9, 2014, 11:44 AM
- The agreement with Assured Guaranty (AGO +2.2%), Ambac (AMBC +1.2%), and National Public Finance (MBI +1.8%) is an important one as - in what would have been a precedent-setting move - Detroit had asked a court to treat its general-obligation debt as unsecured and allow a recovery of just a few cents on the dollar, while treating debt owed to pensions
- Instead, $287.5M of $388M of debt in question will be reinstated at par, and the remaining paper will be assigned to establishing an income stabilization fund for the city's "most vulnerable retirees."
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, MUAC, MUAG, MUAH, GMMB, RVNU
Apr. 8, 2014, 9:46 PM
- An agreement between Detroit and bond insurers Assured Guaranty (AGO), Ambac (AMBC), and National Public Finance Guaranty (MBI) would be a critical step as the city winds its way through Chapter 9 bankruptcy. Detroit emergency manager Kevin Orr has deemed about $410M of previously sacrosanct general-obligation debt as unsecured, a decision bond insurers - who would be on the hook for millions if the paper sees just the 15% recovery Orr has proposed - are howling about.
- "Time is growing shorter," said Michigan Governor Rick Snyder in an interview today. "A lot of work is going on in the mediation process, with great urgency ... [the] best case" is for parties to reach a settlement. A deal, says the Journal, could be struck as early as tomorrow.
- Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, MUAC, MUAG, MUAH, GMMB, RVNU
- Also watching with interest: Syncora Holdings (SYCRF).
Mar. 18, 2014, 3:47 PM
- "With a rating in the double-A range now in hand, National will turn its attention toward executing its business plan and supporting the credit enhancement needs of municipalities across the U.S.," says MBIA (MBI +3.4%) CEO Jay Brown, responding to S&P's upgrade of his company's public finance unit.
- "Were pleased that S&P has recognized the positive steps we've taken to reduce risk and volatility throughout the organization as well as National's strong financial profile and competitive prospects."
- Press release
Mar. 18, 2014, 3:34 PM
- S&P lifts the rating on MBIA's (MBI +3.9%) National Public Finance Guarantee to AA- from A, "reflecting our view of the company's prospective strong business risk profile and strong financial risk profile, based on our belief that the company will have a strong competitive position and strong operating performance, as well as its current extremely strong capital adequacy position."
- S&P expects National "will begin writing business with favorable pricing characteristics as it demonstrates good operating performance and profitability."
- A major catalyst awaited by MBIA's bulls and company management has been S&P boosting National to the AA rating necessary for the unit to get into the profitable business of writing insurance again.
MBI vs. ETF Alternatives
MBIA Inc through its subsidiaries is engaged in providing financial guarantee insurance to the United States' public finance markets. Its business include; U.S. public finance insurance; structured finance and international insurance; & advisory services.
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