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’Ambaaaac! Trouble in mezzanine tranches of CDOs, that is
Here’s a structured finance blast from the past; some trouble in mezzanine tranches of ABS CDOs.
Last week the ailing (in fact, almost dead) bond insurer Ambac announced it would commute its remaining $16.4bn of of exposure to Collateralised Debt Obligations of Asset-Backed Securities.
“I haven’t pulled an all-nighter since college”
So begins the email hedge fund manager Bill Ackman fired off on Monday to NYT business columnist Joe Nocera — an email that was a covering letter for a 5,238-word philippic (“every word is important”) directed against Nocera’s earlier criticism of Ackman’s abortive – and expensive – proxy battle against the directors of Target Corp.
Target 1, Ackman 0
Bill Ackman cannot be pleased. Target’s shareholders on Thursday voted to re-elect its four incumbet directors, defeating the fiery hedge fund manager’s proxy contest to achieve five seats on the retailer’s board.
Ackman gains support in Target battle
Bill Ackman, the activist investor, has scored another victory in his battle to win seats on the board of Target, the discount retailer, after winning support from RiskMetrics, the top US proxy adviser.
Pershing Square critique hits Target
Pershing Square scored a significant win Thursday in its ongoing proxy fight – the “most expensive of all time” – with Target Corp.
As today’s FT reports:
Target, the US discount retailer, has suffered a setback in its efforts to stave off a challenge to its board by activist investor Bill Ackman,
The moving Target
Herein the latest volly in what is already being widely billed as the “most expensive proxy fight of all time”.
That is, Target Corp v. Pershing Square.
Smarting from Pershing Square’s widely publicised “town hall meeting”
Ackman’s Gekko moment
Bill Ackman has had a tempestuous relationship with Target Corp; which has proved a rather large blot on the Pershing Square principal’s otherwise highly successful ride through the financial crisis.
Way back in July 2007,
Weekend catch-up: ABN, HBOS, Target, Woolies
In case you missed these stories:
Dutch unveil revival plans for ABN Amro
The Dutch government on Friday announced plans for a revival of a large part of ABN Amro, the Dutch bank acquired and broken up by an RBS-led consortium last year.
Ackman watch: waking up to FSA
Not, in fact, the UK’s financial services authority, but Financial Security Assurance Inc. A monoline.
Moody’s placed FSA on review for downgrade after US market close on Monday. Joining FSA on the monoline downgrade death spiral was Assured Guaranty.
Bill Ackman: a man with a Plan
Where does he find the time? Bill Ackman, scourge of the bond insurers, has set his sights on Fannie and Freddie.
The activist’s activist – who has been short Fannie and Freddie since July 10 – thinks the government should bin any plans to buy equity in the GSEs,
On Target
Equity Private, guest blogging at Dealbreaker, has two rather interesting sets of figures. They’re the H2 results for Pershing Square IV, the special investment vehicle set up by monoline-shorter Bill Ackman:
Monoline investors hit back on split plans
Ambac has cold feet.
As reported in Tuesday’s FT, the bond insurer has decided not to split. The putative Spitzer plan is not to be. Now only FGIC and MBIA seem to have any intention of separating out their businesses.
Monolines: Breaking up is hard to do
The monolines aren’t looking very mono anymore. Except perhaps in a nasty, sickly way.
Everyone seems to be after a split now – even if they’re not sure how they’d like it to happen.
But forget a bisection of the municipal and structured finance units of the largest bond insurers.
When Dinallo met Buffett: the monoline breakup plan
Bond insurer MBIA hit back on Thursday at Pershing Square’s Bill Ackman – the hedge fund manager who has made a fortune shorting the monolines. Outsiders seem to be finding value in the bond insurer business too.
Jail Ackman!
The monoline appreciation society clearly extends beyond those directly in the business of providing bond insurance wrappers.
Warren Buffett’s interest may have been of the exploitative variety, but now the likes of MBIA,
Monowhine
Reuters have obtained a copy of the testimony MBIA has delivered to a subcommittee of the U.S. House Committee on Financial Services. The hearing is due later on Thursday.
Unable or unwilling to actually explain itself,
Monoline update: hedge funds the only people who know what they’re doing
Perhaps a little perspective is needed, bond insurer-wise.
Markets don’t seem to know how to react. It’s pretty clear that as far as trading monolines goes, equity investors are in hock to whatever the latest headline is.
Ackman: “It is hard to fill a bucket with a hole at the bottom.”
William Ackman, the activist shorter of the monolines, has stepped up his one-man campaign to bring the beleaguered insurers down.
He claims he has obtained the most detailed yet data on Ambac and MBIA’s exposure to CDOs,
Bill Ackman’s letter to the regulators in full, and his monoline model
FT Alphaville warning: This post is long. But worth reading. Bill Ackman has not only provided the rationale for his continued shorting of the monolines, but he’s also put the numbers for his risk modelling up on the internet – as open source.
The bond insurers, a $200bn problem and Wilbur Ross
In the midst of all that rogue trader excitement, we rather forgot about the poor old monolines, teetering on the brink of non-existence and generating noises about the kind of concerted bail-out effort not seen since LTCM.
Downgrades ahead: monolines still don’t have enough cash
In light of Standard & Poor’s subprime risk model adjustment yesterday, bond insurers Ambac and MBIA had a tough trading day. Ambac was down 39 per cent, and MBIA down 17 per cent.
Shares in both fell once more.
How junky is MBIA?
14 per cent junky. More bad news for the bond insurer this morning. Bloomberg report MBIA will languish under the yoke of a 14 per cent coupon on its new emergency capital-raising issue of AA rated bonds:
Ackman vs. the rating agencies; how much cash does MBIA need?
On Thursday, we wondered out loud what was going on with monoline MBIA. They said they were going to meet Fitch’s target of $1bn extra capital by the end of January, and so keep their AAA rating. That AAA rating being essential to MBIA staying afloat as a bond insurer.
Off target: that other Ackman bet
Pershing Square Capital may have made a lot of money shorting bond insurers, but not everything went well for Bill Ackman through the second half of 2008. Here’s one effect of the credit crunch he didn’t foresee:
Bill Ackman, subprime slime and the bond insurers
The slow spread of toxic subprime slime may be about to consume another important but little-known group of market participants – the bond insurers.
A story in today’s FT reports that the monolines,
Ackman takes 9.6% of Target
Bill Ackman, the activist investor, has taken a 9.6 per cent share in Target, the US discount retailer, and says he will push for changes at a company whose shares have risen more than 45 per cent in the past 12 months.
Pershing’s mystery target
The New York Post on Tuesday set a puzzle with its story that Pershing Square Capital has raised a $2bn pot to take a tilt at “just one specific iconic American company.”
The word “iconic” is currently out of favour here at FT Alphaville (oops,