Friday, April 15, 2011

Assured Guaranty (AGO), MBIA (MBI) Jump on BofA (BAC) Settlement

Shares of bond insurers Assured Guaranty (NYSE:AGO) and MBIA (NYSE:MBI) were soaring on news Bank of America (NYSE:BAC) settled with Assured for $1.1 billion in regard to demands from the company Bank of America buy back faulty mortgages.

Other bond and mortgage insurers like MBIA, PMI Group Inc. (NYSE:PMI), Radian Group Inc. (NYSE:RDN) and MGIC Investment Corp. (NYSE:MTG) were all trading up on the news.

Expectations are these companies and others will probably be successful as well in their pursuit to recover costs from lenders as well.

MBIA (whose shares were also soaring) Chief Financial Officer Chuck Chaplin said in a statement the Assured Guaranty settlement “is yet another affirmation of the validity of both our claims and expected recoveries related to improperly originated mortgage loans in insured securitizations.”

MGIC was trading at $8.78, up $0.26, or 3.11 percent, as of 1:44 PM EDT. Radian Group was at $6.31, rising $0.09, 1.45 percent. PMI Group was at $2.24, jumping $0.06, or 2.75 percent. MBIA was trading at $10.73, gaining $1.80, or 20.16 percent. Assured Guaranty was at $17.72, soaring $3.55, or 25.05 percent.

No comments: