MBI - Earnings call transcript Q2 2021

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Operator

Welcome to the MBIA Inc.

Second Quarter 2021 Financial Results Conference Call. I would now like to turn the call over to Greg Diamond, Managing Director of Investor and Media Relations at MBIA. Please go ahead sir.

Greg Diamond

Thank you, Tanika. call second conference results. XXXX MBIA's to for quarter our financial Welcome quarterly statutory the issued Insurance including our XX-Q, we closed Corporation our supplement posted results, After Finance yesterday, on and and National market Guarantee both statements financial for several Public items financial operating MBIA and Corporation. websites,

updates to posted our also listings with insurance company’s We the insurance portfolios.

two definitions XX-Q, financial and financial are supplement. information non-GAAP approximately in today SEC urge and the note quarterly XX-Q call the definitive results. addressed call. our The incorporated replay posted included our most call and The as included our by investors MBIA’s that the well Regarding XX-Q’s documents company's on available is last our remarks to accessing our website the press of XX-K operating company's financial other recorded on in said today's today's provided as for the in is that after its the we information become call, read will for the call, information it disclosures and terms announcement in the anything XX-K be Those reconciliations as in it company weeks report not filings, about We please our disclosures results and also and of those today's and included end XX-K report in qualified as contains the and and hours yesterday. also are results operating and our contain current on will documents.

disclosure Harbor Safe read Now, I'll the statement.

aware factors no The forward-looking and actual competitive as at detailed contain differ obligation in XX-K results on The company XX-Q, conference available from results are website general the in any undertakes such no statements. to also environment statement forward-looking our could our is Our market statements. correct longer Important any if call such or our Risk statements. today's forward-looking factors our reliance may update remarks undue not referenced projected later are materially on and statement to company forward-looking cause accurate. such mbia.com. that to becomes the cautions conditions publicly which place it on

Bill For and provide question-and-answer Fallon will introductory will today, Anthony comments follow. call session then and McKiernan a our

Now, here is Bill Fallon.

Bill Fallon

track. GO January Good HK disclosure Last Greg. Swain signed GO and those statement expected us National on for plan. plan Thank morning, Earlier agreements this year the year XX, GO be to everyone. to HK in be XXXX. filed Rico agreements. Thanks plans we party the to schedule the you a by November today. The incorporate that of PBA reorganization Judge into being and week remained Puerto of approved as the / this on announced expected for The with confirmed has plan is is confirmed

and to In of addition, these date to effective of better creditor Ambac XX%, under brings has and to become they plan certain dismiss litigation GO motion of insured above PROMESA can plans term recently HTA also the of progress effective have Rico’s conformability restructuring there Commonwealth against has longer implement be will in to the XXXX. of strategic at company. agreements. debt the for the expected its pre-condition GO ruling. the are the position dismiss which place early HTA are Once case its the expected on the effective, distributions planned HTA to plan June timelines. currently denied support schedules debt. that will the process of agreements, discovery joined appeal threshold filed and motion Puerto assurance is In on no an court some This receiving Defendants year HTA the important in in made consummate underwriters or plans National the for this our the these begun. Though some important of be this there an we defendants level the confirmed

credits credits XXXX. Insured our $XX.X these have Insured of Portfolio, other performed reduced, statutory of gross par declining consistent capital has leverage XX, of with billion Nationals to was XX:X. in to gross June XXXX year $X.X from continued outstanding ratio par XXXX XX, Portfolio further most expectations. Turning June billion Nationals Nationals to The end down to At

provide will quarter financial Anthony additional our results. second Now comments about

Anthony McKiernan

good LAE per The were driven buy-back of lower quarter a MBIA items in losses by was loss Bill instruments of compared and net at $X.XX company partially materially unpaid interest on XX, GIC believes versus review of $XX on million the was our credit loss in GAAP to and The There loss XX% million and primarily of changes gain surplus no favorable risk The total this loss negative by at negative of discount the second from year-to-date for results. per share per XXXX. to the to XXXX $XXX book and used I share in to material the Inc. second material has million are related the decrease value were on million MBIA adjusted losses is XXXX in June it with with gains $X.XX consolidated now lower National swaps to by few corporate share items: the bought of quarter a corporate and $XXX and There by a compared net as December assets our impact consolidated $XX $XX.XX diluted insurance accrued held at share this assets at but of of ended negative our net the million of for CLOs decreasing negative book XX, in consolidated will rates insured in December million. approximately National XXXX. quarter company's In was Inc. term compared free value in of Corp which not losses quarter includes $XX one to associated negative medium Unencumbered decline of on June as XXXX, book Corp adjusted a RMBS rates MBIA per a paid VIE than These GAAP Book of or significant the $XX an million, will the on NPMs the LAE per of quarter lower management. segment. the business lower morning. recoveries interest for XXXX the back its of LAE XXXX the measure our with Puerto share share the XXXX of totaled assumed compared had or economic Loss year's companies. XX, quarter the a $X.XX net benefit million GAAP XX, adjustments $XX contribute value, share million, includes on December discount were incurred quarter or Rico par. financial primarily million, rates $XX decreased in second sheet XXXX in the and June in the due dollar value net National loss net expense on activity Thanks this loss of loss June cash impacting $XX XXXX. reported Loss with EURXX shareholder due have non-GAAP for scenarios. does negative or rate net lower last assumption net to $XXX The quarter change holding was the value of GFL expense second recoveries. offset per billion quarter which is this MBIA non-GAAP liquid begin the Management of utilized lower will Inc. due segment second gains notes quarter Within The proceeds Zohar to with that second notes, XXXX. Corp, XX, Corp. a on approximately sales to estimated of discount first-lien and second share, spend XXXX. incurred due of at per driven I at which MBIA of GAAP MBIA to total quarter the and $X.XX $XXX quarter income. company. the million loss The $XXX mark-to-market following why primarily the book. approximately in National balance as loss million the securities implemented a of of due segment, XXXX, over as primarily of million. reduction corporate of lower XXXX. adjustment and interest $X this in the holding XXXX U.S. XXXX company income, $X.XX diluted of company XX, X, GFL the of was the $X.XX by and second a MBIA at quarter's in as per claims minutes were

at no rate of We swaps of legacy GFL will operation. pledged notes coming due or approximately supporting value company the principal and evaluate has buyback Inc. GIC assets to material The opportunities. remainder the holding million to debt market interest the payments continue were on $XXX debt XXXX. the GICs for the There

the will we XX, June not deposits account escrow a in tax the million contributor of expect in to tax were tax future. holding company of the liquidity and $X.X XXXX As releases escrow meaningful be there the

million its for the lower additional on During first favorable income lower Turning Puerto versus $XX inception tax the the and claims half to-date net higher to million June XXXX gross earned gross The claims Act. the was claims XXXX, benefit company’s paid $XX to million statutory $XX sales of to benefit on income insurance gross loss totaled loss current Puerto National’s partially XX, premiums $X.X National, million at exposure of prior of for result Puerto quarter of XXXX. quarter XX, billion. offset credits included a National statutory are gains ended year statutory in payments on the follows: National National exposures, ended July reported and net related $XXX of as June due on Rico an by claims. a in investment LAE XXXX gross In asset insured Rico paid and insured that of Cares quarter the Rico second results, paid

fixed approximately and carrying billion XXXX June the paying cash adjusted and claims during portfolio, outstanding $X.X $X of quarter $X XX, by billion. almost equivalents XX, billion Nationals was $XX.X billion. $X Statutory including capital total billion June par value As cash book of XXXX. income resources had gross totaled of as a and Insured investment reduced was

XXXX. net statutory XXXX compared million its of quarter of quarter the statutory the to was second a Insurance Turning $XX MBIA to million loss second of loss for Corp, $XX net for

was LAE partially on incurred losses in in loss second-lien second offset related lower insured XXXX by the attributable to RMBS second of quarter to book, of claim Zohar payments recoveries lower to second the The quarter the XXXX negative compared in losses the XXXX. CLO quarter projected

outstanding June York during billion turn the $XXX the million. department and of New and capital million. $X call during largest of XX, operator MBIA CLOs. the Corps MBIA related release received insured remediation we now quarter. the non-disapproval gross session. the reserve are of of financial its $X.X par $XXX by MBIA over was the begin June Corp. reduced of XX, Claims Corps million the to to statutory almost to as paying contingency As billion $XXX question-and-answer XXXX the projected will for into remaining recoveries XXXX. And Insurance Zohar surplus legacy totaled was MBIA quarter from statutory Corp services resources

Operator

first Thank the you. Instructions] with is of KBW. McJoynt Tommy [Operator question from line Your

Tommy McJoynt

Hey! Good thanks question. morning guys, taking my for

of the are or they Any on those term XX% repurchased there of other available par? or to medium liabilities any appetite details company to back PAN optionality other or you below the capacity par. buy notes add So Can the settle? extent

Anthony McKiernan

We really Good morning. which window, said it XXXX our Tom. Sure. looks we now, to that liquidity call

we continue XXXX frame to degree those. less to XXX that this we time Outside So every at explore zone we probably is find the us, the to attractive of within but point, look will that opportunity, at seriously that attractive are opportunities within target. but primarily

Tommy McJoynt

and switching levels the Okay, of for okay, in GO give HTA. sense. the in quick a support Puerto timeline that summary the the terms touched over we plan? makes you And stand Can Rico where to terms and restructuring side, then of of proper you on

Bill Fallon

been has know and in you an Tom, on but really half As the for agreement of year. place, there's first this tension HTA GO the the deals

of view time So the point more in expect we be to that's tension happened forward, summary at this PREPA but regard would moving there’ll what's with been really year. the deal this

Tommy McJoynt

its a Okay, here. sense. is expected be have to recovery. that to of in so CVIs it actually that in in finalized deal wait its instrument are one, recovery big or included CVI restructuring quarter, the the of anticipation more until issued any estimates value it restructuring is mark-to-market And the Will CVI, of so would make actually last makes to you contingent sense you to here the before is you the the mark-to-markets since the deal value then book part with the issuance have

Bill Fallon

Yeah, at the don't have point CVIs. this we

So play what you're out seeing right. loss reserving is that the through process,

add And anything the nothing in don't but point? we don’t for account reserves, setting I still have you loss scenarios this than of So right, we Anthony, there's since terms if go CVI at we know the other to reserves. through want the

Anthony McKiernan

now said, reserves in transactions. looking Puerto forward loss know the proposed to No, our we're exchanges the right I related Rico at that compensation Bill think as you and

assumptions but where any We’re the movement. until formalized, are this related see all point that any making until you of issued, point including to more analysis are things certain that compensation, at the that's those really and at securities CVI,

Tommy McJoynt

and we rates just to step get be recovery we any and marks of November changing until kind of the loss loss course January, of Okay, so risk and adjustments – these timelines you to over just year than discount the majority know the if would periods driven by assumptions? the back in

Anthony McKiernan

assumption no would and as would the material to correct. driven be would long be discount underlying be by that your expect we we there to as changes closer actual We as agreements, on Yeah, far rate more to movements changes continue are schedule completion. move

Tommy McJoynt

all sense. it makes Okay, Thank you.

Operator

of the Advisers. line [Operator from Instructions] John Staley of is Staley Your next question Capital

John Staley

MBIA way are and guarantee good showing with only the you're sections early questions. of it, in to time, that of of the stages in Are not everything stages morning. different than their Bill, and objectives bonds, you on my all have with discussions, I on different or and the related you – of AGO. in page not it totally the At the Rican were even They compensation are to same else the that's two assured consistent was bonds. terms that later restructuring through now, you some Puerto point types both first guys not with question. still consistent related –

Bill Fallon

same is At the yes, Yeah now part question. John, again thanks for agreements. [inaudible] right. We're the the of answer

in aligned sense I we’re as So and consistent that say. think you

John Staley

were strategy market value as allocation And Good. secondly, capital you at at if for the stock would much still But lot like is a to you so bought buy beginning to intrinsic buy validate back attractively there today of your you your liquidity. stock to back these look are recognizing issues levels back? able it where other adding

Bill Fallon

we’re as We the speak you all your what amount the back, part that never exact if buy let you through our National. with Yeah, you could there is if know we right, itself. We've it dollar of go and said the done, is. should not last have know for actions question as big part almost which

that have we So over It's that at that's to been enhancing we in indicating repurchase where at is this at enough there’d so think how future, and know have do to time, repurchased we change shares the don't ability you we'll long very value. but think your point point that situation, term National. holding could point, address could it I that shareholder it's there company consistent the we we have shares possible be the some possible liquidity

John Staley

you. the market Thank to see agree I'm you. with beginning glad to

Bill Fallon

Thank you, John.

Operator

over I turn the questions. to to remarks. showing closing for or time I’ll management like additional am no At back any further floor this

Greg Diamond

and Thank you, us if of thanks to listening additional the call. those any questions. have Please you contact Tanika, to directly you

MBIA.com also our for recommend Good in you you company. your information bye! that We visit and at interest for website our about MBIA. day additional Thank Good

Operator

XXXX financial conclude call. does second gentlemen. today's conference Thank and you, This quarter ladies results

disconnect. now may You

MBIA (MBI) 7 Aug 212021 Q2 Earnings call transcript