Municipal bond insurers add an extra layer of protection, but those agencies have declined in number from seven to three since 2008.
The utility's
bond insurers also agreed to buy $ 128 million in new bonds that will help the utility keep operating.
So far, the municipal bond market has seen only a modest reaction to the recent negative credit watch being placed on the ratings of
several bond insurers.
This company took part in the bankruptcies in Detroit and Jefferson County in Alabama and worked
with bond insurers in Puerto Rico's debt.
I won't be at all surprised if one of the major
bond insurers in the US goes belly up.
This strategy implies that he suspects that the
major bond insurers have problems more severe than have been discounted by the equity and debt markets, and that their AAA bond ratings will remain under threat for some time.
Even if one or
more bond insurers were to disappear, the downgrade in most municipals would be from AAA to AA or A. Not good, but not the end of the world.
Detroit has grown closer to agreement on most of its restructuring plan,
after bond insurer Syncora (the biggest opponent of the city's plan) agreed to a deal on Monday.
Do you vote to sell off the public domain, sell off the Athenian water supply, sell off your islands, sell off your mineral rights in the sea, sell off even the Parthenon — do you want to do that so that French banks and
American bond insurers will not lose money?
Detroit has reached a settlement with
bond insurers over the treatment of some bonds in the city's bankruptcy, Detroit emergency manager Kevyn Orr told CNBC Wednesday.
Bondholders and
bond insurers argued that Stockton's refusal to demand pension concessions shows that it failed to negotiate in «good faith» with creditors, a prerequisite for municipal bankruptcy.
Consider this article from the WSJ,
Bond Insurer Seeks to Split Itself, Roiling Some Banks.
In light of recent events, we believe it is likely that
most bond insurers will be prevented from upstreaming dividends to their holding companies as a result of regulatory intervention, as regulators work to preserve capital for policyholders.
Following trial, obtained a substantial judgment for plaintiff surety in complex construction lien dispute between two national
construction bond insurers.
Pershing Square shorted some of the subprime industry's major players — including mortgage guarantors Freddie Mac (FMCC) and Fannie Mae (FNMA) and
bond insurers such as MBIA (MBI) and Ambac (ABK)-- and made billions of dollars.
The island's governor, Alejandro Garcia Padilla, recently claimed that the nation wouldn't be able to meet its obligations, raising concerns among investors and
bond insurers.
Bond insurers with more than $ 1 billion at stake repeatedly argued for the sale of valuable art but dropped that plea and settled for much less.
Puerto Rico's power authority, which supplies electricity to the island's 3.6 million people, made a $ 415 million debt payment that was due Wednesday after reaching a deal with
its bond insurers to borrow more money.
The distressed power utility made a deal with
its bond insurers to borrow more money.
Last year, for example, Deutsche Bank agreed to reimburse Assured Guaranty,
a bond insurer, for 80 percent of losses on eight residential mortgage securities it had insured.
If you don't mind, I'd be interested to get your take on the current status of
the bond insurer problem and how you think it might play out.
The high degree of balance sheet leverage for certain
bond insurers means that small changes in the values of these portfolios have a large impact on the bond insurers» capital base.
The Capital Base included in CPR is also likely to be overstated because the investment assets of
the bond insurers consist primarily of bond insurer guaranteed obligations that are valued inclusive of the guarantee, when they should be valued on an unwrapped basis.
You have stated that
bond insurers have no accelerating CDO guarantees and that all of their contracts are structured as «pay - as - you - go.»
«For Moody's [or Standard and Poor's] to put
a bond insurer on negative watch (indicating a rating cut was being considered) could have extremely negative ramifications» for the entire bond insurance business, said David Merkel with Hovde Capital Advisors in Washington, DC.
MBI, -0.58 % on Monday it seemed «disingenuous at best» that
the bond insurer asked the rating agency by email to destroy non-public information while telling the public it would work with Fitch to keep a AAA rating.
That isn't to say this is the absolute bottom, but I think as we finally resolve
the bond insurer issue (one way or another) municipal buyers will come back in.
The only real problem in munis are
the bond insurers.
8)
The bond insurers aren't totally dead, though.
For
the bond insurers that are insolvent, this is the paradigm that will be followed as bad guarantees get settled.
In that time, the Philadelphia concern has been miles ahead of the established agencies in downgrading the likes of Enron and WorldCom and more recently the mortgage and
bond insurers, mortgage originators and investment banks caught up in the subprime - mortgage crisis.
«The rating agencies have lost as much credibility as
the bond insurers,» said Richard Larkin, a municipal bond analyst with JB Hanauer & Co. in Parsippany, New Jersey.
Most of the so - called inverted credit curves are concentrated in securities firms, banks and
bond insurers that reported more than $ 100 billion in losses on mortgages to borrowers with poor credit.
For example, what happens if and when
the bond insurers collapse or if the ratings agencies start to rate some of the securities held as collateral at the Fed below investment - grade?
Bond insurers have posted record losses after expanding from guarantees on municipal bonds that rarely default to insuring securities tied to mortgages that are now going delinquent at the highest rate since 1985.
«This rating charade created a Wall Street shell game constructed by the ratings agencies for the benefit of
the bond insurers,» he said, adding that bond insurers profited from unnecessary premiums and interest paid by taxpayers.....
2) Bailout obsession — Mr. Buffett has been offered «distressed» deals over the last few decades from recent deals of GS, GE,
bond insurers, etc. back to Long Term Capital Management and SB.
A bond insurer guarantees timely payment of principal and interest in the event of a default.
In addition to these multiple complex construction litigation issues, we are also experienced when it comes to working with numerous and sometimes voluminous parties, including multiple plaintiffs and multiple defendant contractors, subcontractors, surety
bond insurers, license bond insurers, and vendors and suppliers.
Doug has advised on large multi-million dollar BPS compliant procurements, SaaS contracts, ESCO contracts, construction contracts, 3P projects, commercial escrow arrangements and deposit trust agreements involving Tarion or
Bonding Insurers.
As Ackman was winding down his battle with
the bond insurer, he started buying shares of Target.
The bond insurer continued to depict him as an avaricious short - seller, and Wall Street seemed to agree.
The bond insurer complained to then - New York State Attorney General Eliot Spitzer.