MBIA (MBI) Is Going to Stick It to Bank of America (BAC) for Its Delay Tactics - Analyst
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Price: $14.80 +1.23%
Rating Summary:
2 Buy, 1 Hold, 0 Sell
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Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
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MBIA Inc. (NYSE: MBI) is turning the heat up on Bank of America (NYSE: BAC) due to the bank behemoth dragging its feet on an amicable settlement, according MKM Partners' Harry Fong. This could make it more costly for BofA in the long run, he said.
At this morning's conference call, MBIA's CEO Jay Brown suggested MBIA's "direct economic damages from the unpaid Bank of America putbacks are now approaching $5.0 billion, reflecting both incurred losses and accrued statutory interest."
While BofA's strategy is to force MBIA into a non-economic and heavily discounted settlement, Fong doesn't see that happening on Mr. Brown's watch. "He has ample cash to fight until the end (should be 2013) and has proven over his career to be an ample negotiator," according to Fong.
Fong now believes MBIA is unlikely to settle for anything less than $3.0 billion on its reps and warranty case against BofA. And if the case goes to trial, MBIA will likely look for a lot more, he said.
The analyst is reiterating his Buy rating and price target of $18, based on roughly 50% of National’s ABV and 30% of MBIA Corp's trailing ABV.
For an analyst ratings summary and ratings history on MBIA Inc. click here. For more ratings news on MBIA Inc. click here.
Shares of MBIA Inc. closed at $8.76 yesterday, with a 52 week range of $5.99-$13.50.
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At this morning's conference call, MBIA's CEO Jay Brown suggested MBIA's "direct economic damages from the unpaid Bank of America putbacks are now approaching $5.0 billion, reflecting both incurred losses and accrued statutory interest."
While BofA's strategy is to force MBIA into a non-economic and heavily discounted settlement, Fong doesn't see that happening on Mr. Brown's watch. "He has ample cash to fight until the end (should be 2013) and has proven over his career to be an ample negotiator," according to Fong.
Fong now believes MBIA is unlikely to settle for anything less than $3.0 billion on its reps and warranty case against BofA. And if the case goes to trial, MBIA will likely look for a lot more, he said.
The analyst is reiterating his Buy rating and price target of $18, based on roughly 50% of National’s ABV and 30% of MBIA Corp's trailing ABV.
For an analyst ratings summary and ratings history on MBIA Inc. click here. For more ratings news on MBIA Inc. click here.
Shares of MBIA Inc. closed at $8.76 yesterday, with a 52 week range of $5.99-$13.50.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
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