MBI - MBIA Inc.

[fareastwarriors]

http://blogs.wsj.com/moneybeat/2013/05/06/mbia-shares-leap-42-on-settlement-with-bank-of-america/

 

 

WSJ is reporting BofA will pay MBIA cash of about $1.6 billion as well as some IOUs  bringing the total amount to 1.7 billion. In addition, Bank of America will provide a credit line to MBIA of $500 million.  BofA will also take a stake in MBIA’s holding company of roughly 5%.

 

 

[buylowersellhigh]

http://blogs.wsj.com/moneybeat/2013/05/06/mbia-shares-leap-42-on-settlement-with-bank-of-america/

 

 

WSJ is reporting BofA will pay MBIA cash of about $1.6 billion as well as some IOUs  bringing the total amount to 1.7 billion. In addition, Bank of America will provide a credit line to MBIA of $500 million.  BofA will also take a stake in MBIA’s holding company of roughly 5%.

 

How do people view this for BAC?  I know most of you wanted over and done with already.

 

 

[dcollon]

I want to congratulate this board and Sanjeev.  I'm telling you, pretty soon the WSJ is going to be sourcing this board for information.  Between,  BAC, AIG and MBIA there is some great work being done here.

 

The community that has been created at "the corner" is amazing.

 

[racemize]

http://blogs.wsj.com/moneybeat/2013/05/06/mbia-shares-leap-42-on-settlement-with-bank-of-america/

 

 

WSJ is reporting BofA will pay MBIA cash of about $1.6 billion as well as some IOUs  bringing the total amount to 1.7 billion. In addition, Bank of America will provide a credit line to MBIA of $500 million.  BofA will also take a stake in MBIA’s holding company of roughly 5%.

 

How do people view this for BAC?  I know most of you wanted over and done with already.

 

I view it as happy news.  Adding the pullbacks on the 8.5 billion settlement, it seems like we are close to getting the litigation behind us.

[valuecfa]

Wooohoo. Good day!

 

I just picked up more shares at 13.30.

 

I am full.

[Cardboard]

Awesome, but also a very stressful day for me. I am loaded up with May $10 calls. What to do now?

 

Cardboard

[Kraven]

Congrats to all.  It did seem as if something was cooking when there was no sniping at each other the past few days.  It's not like either of these guys can keep their mouths shut.

[Kraven]

Awesome, but also a very stressful day for me. I am loaded up with May $10 calls. What to do now?

 

Cardboard

 

That falls into what we used to call "high level problems". 

[txlaw]

Congrats to all.  It did seem as if something was cooking when there was no sniping at each other the past few days.  It's not like either of these guys can keep their mouths shut.

 

Haha, so true.

[txlaw]

http://blogs.wsj.com/moneybeat/2013/05/06/mbia-shares-leap-42-on-settlement-with-bank-of-america/

 

 

WSJ is reporting BofA will pay MBIA cash of about $1.6 billion as well as some IOUs  bringing the total amount to 1.7 billion. In addition, Bank of America will provide a credit line to MBIA of $500 million.  BofA will also take a stake in MBIA’s holding company of roughly 5%.

 

How do people view this for BAC?  I know most of you wanted over and done with already.

 

I view it as happy news.  Adding the pullbacks on the 8.5 billion settlement, it seems like we are close to getting the litigation behind us.

 

Same.

[valuecfa]

Nice timing Eric!

 

I had it at about a 85% position including calls

[muscleman]

Wooohoo. Good day!

 

I just picked up more shares at 13.30.

 

I am full.

 

Congrats! You are one of the first people here who had the guts to buy MBIA and held on to it during the ups and downs for  the past 2 years. I really appreciate your time, courage and analysis skills.

It is ironic that I sold this stock just a few days before this settlement. I thought about buying it back last Friday but didn't have the guts to pull the trigger. ::)

I guess I just need to be more patient in the future. :)

[valueorama]

Great work here. But the stock is not done yet.

 

I know there is more upside. But how much more?

 

 

[valuecfa]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

[txlaw]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

[blainehodder]

Eric....MAN!!!!  That is unreal :)  Congrats everyone!  This board is unbelievable!

[fareastwarriors]

http://online.wsj.com/article/SB10001424127887324326504578466982636317390.html?mod=WSJ_hps_LEFTTopStories

 

BofA, MBIA Agree to Mortgage Deal .

 

Bank of America Corp. BAC +4.33%and MBIA Inc. MBI +38.45%have agreed to a $1.7 billion settlement of a long-running dispute over who will pick up the tab for faulty mortgage securities issued during the U.S. housing boom, eliminating major legal questions for both companies.

 

The pact, which comes as MBIA faced a rise in mortgage-related claims, will keep the Armonk, N.Y., company's insurance unit out of the hands of the New York state financial regulator, said people familiar with the deal.

 

MBIA shares surged 14% in midday trading Monday, before its shares were halted. A Bank of America spokesman declined to comment.

 

Bank of America will pay MBIA $1.6 billion in cash, along with some other compensation, and provide MBIA with a credit line of $500 million. BofA will also take a stake in MBIA's holding company of roughly 5%.

 

The settlement follows talks that have been on-again/off-again for more than six months, said people familiar with the matter. The two sides worked through the weekend, as did New York Department of Financial Services Superintendent Benjamin Lawsky, to bring about the deal.

 

It is one of the last overhangs for MBIA, which was sued by more than a dozen banks over its split during the financial crisis into one healthier bond insurer that focuses on guaranteeing municipal-bond payments and another that insured complex financial instruments and mortgage securities that soured during the crisis.

 

Mr. Lawsky inherited the matter when he took over as New York's superintendent of financial regulation in October 2011, and he has pushed for more than a dozen deals with banks and MBIA to try to keep the state from taking it over, which is known as receivership.

 

One deal was a $1.1 billion deal with Morgan Stanley MS +2.46%. Société Générale GLE.FR -0.09%still has outstanding claims against MBIA. In December 2011, Morgan Stanley's settlement with MBIA was facilitated by an intercompany loan of more than a billion dollars from National, MBIA's healthier municipal-bond insurer to Mbia.

 

Both boards of BofA and MBIA have given approval for the deal in principle to move forward, said people familiar with the deal.

 

 

[muscleman]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

 

That would be a long time from now. Look at AGO. It settled with BAC in 2011 and still couldn't write insurance for AAA rated bonds.

[valuecfa]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

 

That would be a long time from now. Look at AGO. It settled with BAC in 2011 and still couldn't write insurance for AAA rated bonds.

 

Apples & oranges. Have to go back to work, would love to chat about this all day

[muscleman]

So now all of the $1.7 bn proceeds will be used to pay down the national loan?

I assume the settlement also includes commutation of the BAC's CMBS? In this case, will the remaining proceeds likely be able to fund all the remaining commutations in ShitCo?

With this kind of settlement, is ShitCo still ShitCo, or is there some remaining value in it?

 

[muscleman]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

 

That would be a long time from now. Look at AGO. It settled with BAC in 2011 and still couldn't write insurance for AAA rated bonds.

 

Apples & oranges. Have to go back to work, would love to chat about this all day

 

When you have time, could you please share with me your thoughts on this?

[ERICOPOLY]

It's five o'clock somewhere!

[Guest hellsten]

I want to congratulate this board and Sanjeev.  I'm telling you, pretty soon the WSJ is going to be sourcing this board for information.  Between,  BAC, AIG and MBIA there is some great work being done here.

 

The community that has been created at "the corner" is amazing.

 

+1

 

Congratulations to everyone who owns MBI (and BAC) ;D

[txlaw]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

 

That would be a long time from now. Look at AGO. It settled with BAC in 2011 and still couldn't write insurance for AAA rated bonds.

 

Define "long time from now."  AGO writes new business.  National does not -- yet. 

 

Being AAA would be nice, of course.

[txlaw]

This thing is still significantly undervalued. It's a complicated situation, that i don't think the market fully appreciates...i'm not selling anywhere near this price.

 

Same.  Once National starts writing insurance again . . .

 

That would be a long time from now. Look at AGO. It settled with BAC in 2011 and still couldn't write insurance for AAA rated bonds.

 

Define "long time from now."  AGO writes new business.  National does not -- yet. 

 

Being AAA would be nice, of course.

 

From the AGO 10-K:

 

Other financial guaranty companies that had been active prior to 2008 experienced significant financial distress during the financial crisis and currently no longer have financial strength ratings adequate to remain active in new business origination. Specifically, among the legacy competitors, neither Ambac Assurance Corporation ("Ambac") nor Financial Guaranty Insurance Company, the parent companies of which filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in 2010, are writing new business. MBIA Insurance Corporation, which transferred its U.S. public finance exposures to its affiliate National Public Finance Guarantee Corporation, is not writing new business. National Public Finance Guarantee Corporation, a company that insures only U.S. public finance obligations, currently appears not to have financial strength ratings adequate to issue new financial guaranty policies on public finance obligations. Neither Syncora Guarantee Inc. nor Radian is writing new business. CIFG Assurance North America, Inc. ("CIFG") has been restructured but is not writing new business; it ceded a significant portion of its U.S. public finance portfolio to AGC in January 2009.

 

With respect to new entrants into the financial guaranty industry, Berkshire Hathaway Assurance Corporation commenced business in 2008 and did not write new business in 2010, 2011 or 2012. It did issue policies in early 2013 in support of a financing for an affiliate. Municipal and Infrastructure Assurance Corporation ("MIAC"), another potential entrant into the financial guaranty industry, was unable to raise sufficient capital in 2010 in order to write business; Radian purchased MIAC in 2011 and sold MIAC to Assured Guaranty in 2012, which renamed the company MAC and announced its intention to launch MAC in 2013 as an insurer of U.S. municipal bonds. Build America Mutual Assurance Company (“BAM”) commenced operations in 2012 as a U.S. municipal bond insurer and currently serves as the Company's only active competitor in the financial guaranty industry.

 

In the future, new entrants into the financial guaranty industry could reduce the Company's future new business prospects, including by furthering price competition or offering financial guaranty insurance on transactions with structural and security features that are more favorable to the issuers than those required by Assured Guaranty. In addition, the Federal Home Loan Bank has been authorized to participate to a limited extent in the municipal financial guaranty market.