Allstate has BV equity of around $22bn vs a higher market cap of around $28bn.
This equity is geared to support $159bn of assets of which $121bn are investments and excluding short term assets, investments total around $115bn.
Although Allstate had a conservative investment portfolio recent events plus the recent downgrade of the monolines means significant writedowns in investment values can be expected. Below is tabled the writedowns forecast assuming a number of the AAA wrapped munis are downgraded, corporates are downgraded to reflect the increasing defaults (back to the historical mean), ABS,CMBS and RMBS reflect current conditions plus the impact of monoline downgrades and global equities experience a drop in value.
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| | FaveValue | | Writedowns | | U.S. govt and agencies | 4,365 | 100% | 0 | | Municipal | 24,651 | 95% | 1,233 | | Corporate | 40,363 | 95% | 2,018 | | ABS | 9,597 | 60% | 3,839 | | CMBS | 8,317 | 70% | 2,495 | | RMBS | 6,960 | 50% | 3,480 | | Foreign government | 2,856 | 100% | 0 | | Redeemable prefs | 60 | 100% | 0 | | Equities | 7,811 | 85% | 1,172 | | Home loans | 10,473 | 80% | 2,095 | | Investments | 115,453 | | | | ProForma Writedowns | | | 16,331 | | BV Equity | | | 21,634 | | New BV Equity | | | 5,303 | | | | | |
Expect to see the share price drop to $35 over the next few months to reflect future writedowns.
$50.19 (06/11/08)
