Several things were made clear by Assured's recent financial report.
First, the NPV of future business can go to zero and the company's stock remains very attractive.
Second, repurchase demands are making headway.
Third, Assured has much less incentive and desire to pursue the commutations that MBIA has been inking. Assured spreads never blew out like MBIA Corp, the business they underwrote performed better, and their ratings stayed higher. The only thing that could change this are strict and "dumb" ratio limits by S&P.
Fourth, some demand for financial guarantee insurance is quite inelastic. The due diligence, surveillance and recovery skills of the insurers have value with or without ratings uncertainty.
Fifth, Sean McCarthy was in Japan. That probably means one or both of these two things:
1) he LOVES sushi and/or plum blossoms; or
2) he was visiting some friends, specifically his old friends at Tokio Marine, the largest legacy-FSA reinsurer, or Mitsui Sumitomo both of whom legacy-AGC had no relationship. They are also both rated AA which no other financial guarantor in the USA can match other than Assured. Did I mention McCarthy came from FSA? Dominic was not lying when he said reinsurance was the top choice for capital relief. It should not be shocking they are taking the first steps on a possible deal.
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