Jay said it. Mark said Jay said it. We think Barclay’s just said it again. (Most recently we said it Here but previously Here and earlier (see all in MBIA link and accounting link for why these deals make sense.))
Note: Barclay's did not specifically identify MBIA. But here is the key excerpt from Barclay's annual financial release:
Note: Barclay's did not specifically identify MBIA. But here is the key excerpt from Barclay's annual financial release:
THE TABLE BELOW INCLUDES ALL ASSETS HELD BY PROTIUM AS COLLATERAL FOR THE LOAN. AT 31ST DECEMBER 2010, THERE WERE ASSETS WRAPPED BY A MONOLINE INSURER WITH A FAIR VALUE OF $4,806M (2009: $4,095M). FOLLOWING THE COMMUTATION OF CONTRACTS WITH ONE MONOLINE INSURER IN JANUARY 2011, THERE ARE NO LONGER ANY ASSETS WRAPPED BY MONOLINE INSURERS. ¢ASH AND CASH EQUIVALENTS AT 31ST DECEMBER 2010 WERE $1,364M (2009: $688M) INCLUDING CASH REALISED FROM SALES AND PAYDOWNS AND FUNDS AVAILABLE TO PURCHASE THIRD PARTY ASSETS. OTHER ASSETS AT 31ST DECEMBER 2010 WERE $811M (2009: $567M) INCLUDING RESIDENTIAL MORTGAGE-BACKED SECURITIES PURCHASED BY PROTIUM POST INCEPTION AND OTHER ASSET-BACKED SECURITIES.
It looks like the Barclay’s commutation that we have previously discussed will fall into the first quarter. See the full release for more info on Protium.
We of course think this deal is related to MBIA due primarily to Jay's comments and the Barclay's withdrawl from the transformation litigation.
We are surprised that Barclay's didn't squeeze this into the same quarter as JP Morgan and the Maple Leaf banks in order to mask the particulars of their deals. This could have been due to an inability to squeeze it into the quarter. Then again maybe this was planned to facilitate other deals in the first quarter. Morgan Stanley comes to mind, see more on their math here.
Update: There were commutations in Q4 that we did not previously show here. MBIA could be both or either of these transactions. We think they are at least one. Here is the Barclay's excerpt:
It looks like the Barclay’s commutation that we have previously discussed will fall into the first quarter. See the full release for more info on Protium.
We of course think this deal is related to MBIA due primarily to Jay's comments and the Barclay's withdrawl from the transformation litigation.
We are surprised that Barclay's didn't squeeze this into the same quarter as JP Morgan and the Maple Leaf banks in order to mask the particulars of their deals. This could have been due to an inability to squeeze it into the quarter. Then again maybe this was planned to facilitate other deals in the first quarter. Morgan Stanley comes to mind, see more on their math here.
Update: There were commutations in Q4 that we did not previously show here. MBIA could be both or either of these transactions. We think they are at least one. Here is the Barclay's excerpt:
CLO ASSETS WRAPPED BY NON-INVESTMENT GRADE RATED MONOLINES AND CLASSIFIED AS LOANS AND RECEIVABLES DECLINED TO A FAIR VALUE OF £5,873M (2009: £7,994M), FOLLOWING THE UNWINDING OF CERTAIN PROTECTION DURING THE YEAR WITH A NOTIONAL OF £2,745M. AS A RESULT, THERE WERE CLO ASSETS WITH A FAIR VALUE OF £1,969M AT 31ST DECEMBER 2010 (2009: NIL) NO LONGER PROTECTED BY A MONOLINE INSURER. THE REMAINING ASSETS CONTINUE TO BE MEASURED AT FAIR VALUE THROUGH PROFIT AND LOSS.
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