MBIA INC Q3 FY2024 earnings call

• Revenues and expenses both improved compared to Q3 2023, resulting in a lower net loss. - Lower losses related to variable interest entities associated with MBIA Insurance Corp. and lower loss and loss adjustment expense associated with National PREPA exposure. - PREPA mediation extended to January 31, 2025; waiting for First Circuit Court of Appeals decision on PREPA bondholders' rights. - MBIA Inc.'s book value per share decreased $6.63 to negative $39.19 per share as of September 30, 2024, primarily due to consolidated net loss for the year-to-date period.

For National: In the third quarter of 2024, National reported a statutory net income of $19 million, compared to a statutory net loss of $133 million in the third quarter of 2023. The gross par amount outstanding for National's insured portfolio declined by approximately $2.5 billion from year-end 2023 to about $26 billion at the end of Q3 2024. National's leverage ratio of gross par to statutory capital was 26:1 at the end of Q3 2024, and it had total claims paying resources of $1.6 billion with statutory capital and surplus of $1 billion. For MBIA Insurance Corp.: It reported a statutory net income of $2 million in the third quarter of 2024, compared to a statutory net loss of $14 million in the third quarter of 2023. As of September 30, 2024, the statutory capital of MBIA Insurance Corp. was $87 million, down from $152 million at year-end 2023. Its insured gross par outstanding was $2.5 billion as of September 30, 2024, down about 13% from year-end 2023.

• Substantially reduced uncertainty regarding the PREPA outcome will likely be needed before restarting the process to sell the company. - There is an annual dividend to be paid before the end of the year, but further progress on Puerto Rico is awaited before discussions on capital releases.

• Uncertainty around PREPA outcomes affecting potential capital releases and the sale process. - General market conditions and competitive environment could cause actual results to differ materially from forward-looking statements.

Q: With $1 billion of capital at National, how much of that do you consider excess? And are you seeking approval to release any of that capital?

A: Given they don't focus on ratings anymore, they don't calculate excess capital the same way. They had an extraordinary dividend last year and want further progress on Puerto Rico before discussing capital releases.

Q: National paid a gross claim on July 1 of $122 million on PREPA and national insurance loss recoverable increased by $57 million. Is that equating to a 47% recovery?

A: They don't comment exactly, but the approach is logical and reasonable.

Q: Why aren't you reengaging in selling the company?

A: Feedback received to-date suggests it wouldn't be beneficial for shareholders, but it's a possibility if things change.

Q: Thoughts on Trump potentially resolving Puerto Rico issue?

A: They've been looking for a catalyst to resolve Puerto Rico for years and would support an approach that moves towards resolution. The new governor of Puerto Rico is a Republican and early comments are positive.

Q: COAP with Golden Tree in Cora and Azure extended until March 2025. Can you sell exposure?

A: They always have the right to sell their exposure, and there's nothing preventing finding value in the exposure.

Q: How does PREPA resolution impact electrical power plants in Puerto Rico?

A: Resolving PREPA restructuring or bankruptcy would help facilitate operational aspects of PREPA and save money currently spent on lawyers and mediators.