HAMILTON, Bermuda--(BUSINESS WIRE)--Assured Guaranty Ltd. (NYSE: AGO) (“AGL” and, together with its subsidiaries, “Assured Guaranty” or the “Company”) announced today that it has reached a comprehensive settlement with Bank of America Corporation and its subsidiaries (collectively, “Bank of America”), including Countrywide Financial Corporation and its subsidiaries (collectively, “Countrywide”), regarding their liabilities with respect to 29 residential mortgage-backed securities (“RMBS”) transactions insured by Assured Guaranty, including claims relating to reimbursement for breaches of representations and warranties (“R&W”) and historical loan servicing issues.
Ok, so they settled. What's amusing?
The settlement agreement includes a payment of $1.1 billion to Assured Guaranty as well as a loss-sharing reinsurance arrangement on 21 first lien RMBS transactions.
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In addition, Bank of America and Countrywide have agreed to a reinsurance arrangement that will reimburse Assured Guaranty for 80% of all paid losses on the 21 first lien RMBS transactions until aggregate collateral losses in those transactions exceed $6.6 billion.
So we have that exposure covered.... kinda.... with this payment and we at least have fixed the loss on the rest.
Now again, you promised us something amusing. So far I don't amusing.... what is it?
This, from their earnings announcement:
Uh, so this settlement represents how much of the total provisions that you think you need to have (that is, the amount of total liability against that which is delinquent, and that which is charged off)?
That looks a bit.... aggressive.
Disclosure: No position on BAC's stock at this time.
