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  "documentTitle": "Assured Guaranty (AGO)",
  "authorId": "04_Greenlight_Capital",
  "authorName": "David Einhorn",
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  "presentationDate": "2018-04-23 00:00:00",
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  "notes": "The slide uses a skeptical tone to question the company's accounting assumptions regarding Puerto Rico exposure.",
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      "text": "We think AGO should publicly disclose the calculations so we can better judge whether AGO is using higher internal credit ratings to underestimate losses.",
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      "text": "expected loss: $1,100",
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      "text": "The bulls will correctly say that AGO does not have to mark-to-market its insurance contracts. However, under GAAP accounting, it has to consider a variety of scenarios, assign probabilities to each and then calculate an expected loss. AGO can't simply ignore changing circumstances like the hurricanes.",
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      "text": "The bulls and AGO will contend that they expect most or all of this money will be recovered. We think this is unlikely. Puerto Rico is not like the structured finance deals where AGO recovered most of its losses by suing the bank sponsors. AGO was not defrauded when it wrote insurance on Puerto Rico. In any case, if you think that Puerto Rico bonds are worth 80 cents, you should buy them and sell AGO stock. That's what we have done as a hedge.",
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      "text": "We believe almost all of AGO's public finance reserves are allocated to Puerto Rico. This implies at most a 20% loss and suggests that Puerto Rico can support almost $60 billion of debt, which does not seem like a reasonable conclusion from probability weighting multiple scenarios. We think AGO should publicly disclose the calculations so we can better judge whether AGO is using higher internal credit ratings to underestimate losses.",
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      "text": "Source: AGO 2017 annual report and AGO 2017 financial supplement, both available at http://assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd.; Greenlight calculations; Puerto Rico public debt total from March 2017 Puerto Rico fiscal plan.",
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      "text": "AGO expected loss for Puerto Rico (est.) $1,100; NPV of Debt Service assuming a 20% loss $1,149; Puerto Rico public debt $74,264; Haircut 20%; Implied surviving Puerto Rico debt $59,411",
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      "text": "Management estimates?",
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