"It could be argued that because a traditional financial guarantee policy exists between MBIA Corp. and LaCrosse, the CDS issued out of LaCrosse [carry the same status as] insurance contracts. Politics will inevitably play a role in any decision made by [New York state insurance regulators] and the issue is likely to be extensively litigated," Creditsights argues in its report.
The likelihood of a settlement between Bank of America and MBIA has been central to the thesis of analysts Mark Palmer of BTIG Securities and Harry Fong of MKM Partners, both of whom expect MBIA shares to roughly double over the next 12 months. Creditsights, which primarily focuses on bonds, makes no recommendation on MBIA's stock in its report, though a report Haines wrote in August valued the equity at $15.50. MBIA shares were up 0.57% to $8.89in early trading Thursday.
-- Written by Dan Freed in New York.
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