Bond insurer MBIA is the subject of this research report. The premise is that MBIA is likely to win their lawsuit allowing the company to split its public finance and structured finance units. I think it is highly likely that they will win this lawsuit and that should benefit MBIA’s stock price. I also believe it is just a matter of time before they collect on their rep and warranty lawsuits with a variety of different banks. At T&T Capital Management (TTCM) we prefer Assured Guaranty (AGO) as I think they are much healthier and have nearly as much upside, but I do think MBIA should do very well. The bonds trading at 71 cents on the dollar are particularly attractive although they do go out to 2022. Once the lawsuit victories come in I expect the bonds to rally.
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.