Piper Jaffray Overweight on Assured Guaranty
Piper Jaffray is out with a research report on Assured Guaranty (NYSE: AGO) and it has an Overweight rating and a $25 price target on shares.
In a note to clients, Piper Jaffray writes, "S&P placed Assured Guaranty's operating companies on CreditWatch negative, citing significant concentration risks in the insured portfolio as measured by the largest-obligors test. However, in the release, S&P indicated AGO likely maintains the current AA rating following implementation of steps to reduce portfolio concentration. In a subsequent press release, Assured announced they will meet AA requirements through R&W putback settlements, reinsurance commutations, contract terminations and wrapped bond purchases, supplemented by reinsurance or other risk-sharing vehicles. In addition, management confirmed the company will not raise equity capital to satisfy S&P rating criteria. We view events positively as they confirm our investment thesis on AGO's internal capital generation diminishing the risk of a downgrade."
Shares of AGO gained 91 cents yesterday to close at $11.25.
