MBIA Inc (MBI)

[Enterprising Investor]

Monoline bull cuts Puerto Rico-related loss estimates (6/22/16)

While shares of MBIA (NYSE:MBI) and Assured Guaranty (NYSE:AGO) were hit this week thanks to a breakdown in talks between Puerto Rico and its creditors. The breakdown shouldn't be surprising, writes Mark Palmer at BTIG, but is instead part of the normal back and forth between negotiating parties.

More notable, says Palmer, is the Commonwealth's latest proposal to certain bondholders which he believes gives investors an idea of what a worst-case scenario will look like.

Palmer's previous estimate of MBI's loss per share on its Puerto Rico exposure of $5.14 is cut to $4.26. For AGO, it was $6.09, but has been cut to $5.19.

He reiterates his Buy ratings on both, and lifts the PT on MBI to $14 from $13 (100% upside). The PT on AGO remains at $35 (40% upside).

MBI +3.25%, AGO +0.55%

http://seekingalpha.com/news/3190076-monoline-bull-cuts-puerto-rico-related-loss-estimates