bbarberayr

Positive article on seeking alpha byt one of the good guys (in my opinion). Pretty good summarization: http://seekingalpha.com/article/3293785-puerto-rican-sell-off-brings-forward-tremendous-opportunity-for-assured-guaranty

Just to point out the other side, Julian Robertson on CNBC yesterday saying Puerto Rico could put AGO out of business and is short the stock.

The other thing to consider is that AGO has been a well run company, profitable and has been able to manage big claims without major hits to earnings or book value. If we assume they continue to do this and that Puerto Rico can be managed (which I do), the hits to earnings should be small. On the balance sheet, the Net Loss Expense and LAE Reserve is now $787 million with a Net Reserve (after taking out Salvage and Subrogation Recoverable) of $582 million. This is already a liability on this balance sheet and out of shareholder equity, sio will not hit the earnings or book value. They do not break this out, so we don't know how much of this is for Puerto Rico, but say "U.S. Public Finance Economic Loss Development: The net par outstanding for U.S. public finance obligations rated BIG by the Company was $7.9 billion as of March 31, 2015 compared with $7.9 billion as of December 31, 2014. The Company projects that its total net expected loss across its troubled U.S. public finance credits as of March 31, 2015 will be $310 million, compared with $303 million as of December 31, 2014. Economic loss development in First Quarter 2015 was approximately $9 million, which was primarily attributable to certain Puerto Rico exposures. " I would think most of this $310 million is for Puerto Rico as all the other big trouble spots have been taken care of, but it would be nice if they did tell us, but don't to avoid influencing negotiations. The Net Expected Loss to be Paid was $1,154 million and the Net Expected Loss to be Expensed was $315 million, with this loss spread out over many years with a max loss of $25 million in a single year.

FRom Mark Palmer at BTIG: Assured Guaranty Ltd. Downgrading to Neutral (from Buy) as Puerto Rico Governor to Seek Deferral of Debt Payments We are downgrading Assured Guaranty (AGO) to Neutral (from Buy) and removing our price target after Puerto Rico Governor Alejandro Garcia Padilla in an interview with The New York Times published last night stated that the Commonwealth would not be able to pay its debts, claiming that "there is no other option." The governor had previously rejected the possibility of a default, noting in his State of the Commonwealth address on April 30 that much of Puerto Rico's debt was held by locals. A spokesperson for the governor stated that he would seek to defer payments on the Commonwealth's debt while negotiating with creditors.  AGO has $6.04bn of gross insured exposure and $4.94bn of net insured exposure to Puerto Rico's debt. While it is not yet clear what impact Governor Garcia Padilla's new tack will ultimately have on the bond insurers insofar as the Commonwealth's constitution clearly states that debt payments must be made before other obligations are addressed, we believe the uncertainty created by the reversal of his stance makes the bond insurer stocks unbuyable until clarity around the situation develops and the magnitude of the losses the insurers stand to realize becomes more apparent.  Rep. Jennifer Gonzalez of the New Progressive Party, the party in opposition to Governor Garcia Padilla's Popular Democratic Party, noted to the Times that a move to miss debt payments would require a referendum and an amendment to Puerto Rico's constitution. We believe it is quite possible that the governor will propose such actions when he meets with the Commonwealth's legislature later today prior to a televised address.  Valuation: Our Neutral rating on AGO is based on our view that the increased risk premium associated with the situation in Puerto Rico likely will cause the stock to trade within +/- 15% from current levels over the next 12 months. BTIG does not assign price targets to Neutral-rated stocks. We note that Standard and Poor's has stated that AGO has sufficient capital cushion to withstand a stressed scenario with regard to Puerto Rico's debt while retaining its current credit ratings of 'AA.' However, we also believe that the governor's change in approach will delay indefinitely the company's intention to ask its regulators to allow their operating subsidiaries to make a special dividend to its holding company, which would have facilitated capital return.  It is also unclear what impact, if any, the governor's remarks will have on negotiations between the Puerto Rico Electric Power Authority (PREPA) and creditors including AGO whether they will have any bearing on whether the utility will make the $416mm debt-service payment due July 1.

A few things to think about: 1. Puerto Rico can't declare bankruptcy - it is illegal (unless they change the law) 2. The constitution of Puerto Rico puts debt payment above other payments including pensions, etc. Many of these bonds will have saftey features in them reflecting this that will be hard to overturn. 3. AGO has worked through many of the recent major problems like Detroit, Stockton, Alabama with relatively minor hits to earnings and equity. Management is quite good about managing risk levels - the only loss they've had was in 2007 and it was not large compared to their earnings. 4. Part of a write-off for Puerto Rico has already been taken, although they won't disclose how much for obvious reasons 5. If Puerto Rico did declare bankruptcy, it's not like they can keep all their assets and pay none of their debts. I'm sure debt holders would have claims on assets from PREPA, etc. The write down of 30% you talk about may be reasonable 6. AGO is not only responsible for interest and principal payments missed, so any hit to earnings will be spread out over 20 years. 7. BTIG, which seems to be the investment company with the best handle on AGO, issued a report on Friday saying that there could be upside for AGO (target $41) and MBIA if PREPA made the July 1st payment. They then reduced them to hold on Monday after the President's address saying they were "uninvestable" and would range trade +/- 15% for the next year until this is resolved. WEll, we are at the -15% level now and there is still upside to $41 (almost a double) if this gets resolved with no or small haircuts. For more details of AGO's debt, take a look at http://assuredguaranty.com/uploads/PDFs/AGM_1Q15_Supplement.pdf where they show the amounts at risk by year. You could take these numbers, assume a percent loss on each one and then do a present value calc to the overall hit to the company if you want.

Is there a way to pin the stocks of interest under the "Investment Ideas" section? I see a pin, but can't figure out how to pin the stocks I am interested in at the top so they are always there. Thanks.