Hi Brew, thanks for the sanity check.
I found this issue on
www.quantumonline.com. Acutally the issuer has
3 exchange traded debt issues FSF, FSE and FSB. The quantumonline site has a link to the prospectus, which I read ..... but probably did not understand.
I read the message boards on all 3 securities and all of the press releases.
What impressed me the most was that the company buying Financial Security Assurance (Assured Guaranty) has a AAA credit rating. I gathered from my research that Assured Guaranty will assume the debt.
If true, and if the aquisiton goes through, would not the credit rating of the securities increase causing a significant price increase?
This company is under a cloud because of the credit mess and because of the conventional wisdom that bond insureres time has past. But my understanding is that they intend to foucs on the municipal bond market in the future .... and did not Warren Buffett put a foot in this market recently?
One other point that I picked up is that the "troubled financial products"
part of their business is supposed to remain with Dexia, the current owner of Financial Security Assurance.
Finally, it seems to me that the very long maturity is a plus, not a minus in this case for the simple reason that they are under no obligation to retire the debt any time soon.
Brew, thanks again for responding. I plan to do more due diligence before plunging.
Cheers,
Charlie