In a distressed situation where Syncora's value is limited to the NOL's, there would be a boatload of claims ahead of the equity holders. A Company coming out of BK would certainly have a cleaner balance sheet than one headed towards BK (like the hypothetical Syncora liquidation valuation).
That said, I assign no real value to the NOL's, it's a cherry and nothing more. When we have real income to shield because we are writing new business, they start to have value. But not before then. Which is why Syncora can't put them on the balance sheet.
Odds are at this stage of the turnaround, we will never utilize the NOL's (and certainly not fully). The best chance is that AGO is able to acquire Syncora and finagle the transaction in a way where they can maintain most of the NOL's... as they can probably use them. That said, in a AGO acquisition, Syncora equity holders wouldn't even get full book value, let alone anything for the NOL's. Which is again, why I don't assign any value to the NOL's.
Anyway, that's my opinion. I've done the NOL tango on other investments and it's never once paid off for me.
