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MBIA approves new $250M buyback plan as Prepa deal rejected

Published 06/28/2017, 08:30 AM
© Reuters.  MBIA approves new $250M buyback plan as Prepa deal rejected
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  • One day after a two-notch credit rating downgrade of its National Public Finance unit, MBIA (NYSE:MBI) green-lights up to $250M in buybacks by either the holdco or National.
  • This replaces a previous program that had just $13M remaining.
  • BTIG bull Mark Palmer notes this disclosure came just hours prior to the first media reports that Puerto Rico's oversight board had rejected a deal between Prepa and its creditors. MBIA and Assured Guaranty (NYSE:AGO) the day before had filed suit attempting to block the board from rejecting the deal, which would have meant 15% haircuts for creditors, but not for MBIA and AGO.
  • The buybacks, he says, will allow MBIA to take advantage of any weakness in the stock over the Puerto Rico situation. With the shares at just 0.26x adjusted book value per share, they'll be highly accretive.
  • Now read: Searching For Value On The CCC List


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