MBI - Earnings call transcript Q2 2024

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Operator

Welcome to the MBIA Inc.

Second Quarter 2024 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, Ashley.

As noted, this is MBIA's Conference Call for our Second Quarter 2024 Financial Results. for yesterday, including and quarterly Guarantee our and financial closed on several operating Corporation. market Corporation statutory websites, Insurance our financial statements the we Public posted issued items supplement and After National MBIA Finance both results, XX-Q,

We portfolios. to company's updates posted listings of also insurance our the insurance

company's the incorporated other note the company's in those please call, on SEC today's provided as anything said are the XX-Q information and definitive call documents. Regarding that is in filings, our qualified disclosures by XX-K,

are We urge reconciliations our XX-Qs be and today's not contain X in report read the results of and about the recorded to the they also contain of XX-K website become our our included included also may call. and as MBIA financial as well our our investors replay the in addressed non-GAAP remarks will A as terms end supplement. and financial after XX-K on our operating its the disclosure documents that today XX-Qs on results. today's of quarterly Those most operating call. and current available information call definitions company hours The and approximately

harbor disclosure our Now is here safe statement.

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

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

Bill is here Fallon. Now

William Fallon

today. Thank with everyone. you for morning, us being Good Greg. Thanks,

XXXX for loss quarter loss. loss significant to net due reason loss our second PREPA was Our for net reserve National's primary A quarter. in net the the largely was increase National's

the timely creditors. While The for a PREPA Court to Oversight increased resolution and regarding Appeals good was decision the First for bondholders. decision uncertainty its Board's Circuit has reaction of

We the is interest the Board willingness the Board Oversight its creditors to however, pay, The Oversight people in this believe and resolution under the a PREPA, if ability this approach consensual its change. repay PREPA's best Puerto only have of responsibilities creditors. to the PREPA fulfills of has occur must not and PROMESA. its will Rico; does changes

outcomes the to million that continue resolve is process range associated to believe necessary PREPA we substantially bankruptcy Given possible of company. we can it restart $XXX the before with sell the PREPA to National's claim,

of generally continued perform consistent by $X.X Regarding part credits XXXX. XX:X quarter the our $XX insured outstanding XXXX this was end the of par National's those insured The billion portfolio, of balance quarter second statutory have to gross year-end leverage National's the with to has at capital amount declined the of the ratio gross approximately from of National's expectations. at end billion of for of year. portfolio second

As $X.X of capital approximately resources statutory total and National of XXXX, and billion. $X surplus claims June XX, billion had of paying

comments additional Now Joe results. will provide about financial our

Joseph Schachinger

GAAP morning, of an of and review Thank statutory second provide results. begin overview with non-GAAP you, our good a then will results Bill, our I and and all. XXXX quarter

items. of the higher XXXX per second quarter quarter driven share loss The by share of XXXX. for largely this or consolidated compared company $X.XX GAAP loss of negative The consolidated negative net GAAP X a loss GAAP was reported net quarter second a a to million $X.XX the $XXX for or of million per net $XX a

revising for our to is First, our largely exposure. PREPA higher in loss loss was scenarios related LAE National

loss resolution a ultimate is financial And reflect around PREPA's equity Corp. greater Our value, a of the in the debt. the degree interest now claims negotiated contemplate uncertainty that on higher of fair revaluation of related ] instruments losses outcomes MBIA range largely connection litigated portfolio second and Insurance an paid scenarios item the by of Zohar which received to a in company on CDOs. at [carried with Zohar-related is

XXXX. items, expenses by offset In was and this lower second operating quarter quarter addition mostly to income versus lower VIE losses of these net lower the investment

$XX a The $X.XX quarter per National consolidated related higher of measure, was primarily million for company's value or $XXX primarily million PREPA. for to current share adjusted to at The loss was a for XX, the XXXX. book adjusted or our to to $XX.XX in due the net of with of year-to-date a MBIA the XXXX due XXXX, an LAE share decreased XXXX, a negative share share $X.XX quarter negative per December per in XXXX compared non-GAAP net $X.XX second unfavorable net share a quarter million second as loss XX, as loss, of the $XXX period. $XX.XX June versus per Inc.'s per loss of negative change negative

primarily million with December of total Inc. million following quarter the corporate segment, liquid largely XXXX. company, holding $XX as was as before million approximately MBIA of now negative liabilities XX, Inc.'s value and XX, XXXX, Unencumbered medium-term which of December compared by maturities, the to balance of will which MBIA spending comprises few $XX.XX activities total minutes XXXX. per as sheet. assets. MBIA a June of book $XXX share is of our on of second of The $XX Insurance MBIA Corp.'s had are value retiring segment this Within XX, note held million cash June per The book material the approximately $XXX $XX.XX versus their $XXX decrease XXXX. in XX, on Inc., XXXX. totaled GFL spend share spent in a the Included negative assets assets a million was due euro-denominated of as corporate I

quarter $XX current notes. the spent MBIA to in million senior its purchase addition, In Inc.

notes medium-term accretive the notes prices were the purchased Both senior equity. at and to

corporate assets million the In assets to contracts. investment cash holders, those approximately of guaranteed addition pledged segment's included the collateralize value assets unencumbered and $XXX market mentioned, fully to contract which at I liquid

the to of the loss the million LAE The to restructuring $XX to loss XXXX. by net of statutory the $XXX related a results, million statutory debt national company's second scenarios quarter XXXX and, lesser net of net PREPA the insurance quarter reported higher to investment for driven extent, a statutory loss of second unfavorable Turning was our compared a variance a for primarily revising for loss lower in income.

June the lower by paid due Inc. almost of in special to fourth income to dividends of of $XXX compared December was $XXX $XXX million. invested XX, quarter assets XX, National XXXX, the XXXX, with as-of-right million, XXXX reflects and investment XXXX, largely million. net due reminder, year-to-date $XXX a statutory for million loss capital As down National net period to MBIA totaled the XXXX which as in its

down December Claims XXXX. $XX were from million paying resources billion, XX, $X.X

XX, to insured XXXX, a about $X.X billion, had of National due of This of gross portfolio. year-end was amortization $XX outstanding par billion largely National's which decrease XXXX. regular As June from is down

of Corp. quarter XXXX. of The by MBIA $XX quarter net in driven net salvage. Zohar-related compared of statutory Insurance the for Corp. year loss second Now statutory X income a I'll on Insurance reported net in to XXXX to turn of loss this of second million a quarter the primarily was MBIA for loss the a second LAE

for totaled net derisking June XX, statutory primarily down loss decrease year-end at at $X.X As due XX% claims-paying of was year-end June June period about million, to MBIA insured $XX Insurance its XXXX. Corp.'s million reserves XXXX, XXXX, XXXX. in par $XX year-end million MBIA and of as XXXX, paying we of and $XXX from XX, to outstanding held resources Insurance was resources partially par driven year-to-date of XX, exposures million. of down claims. the We The which compared $XXX paying the our we're was by capital XXXX, Corp. $XXX for gross Claims at from million outstanding gross proactive XXXX billion

session. to will begin turn the now question-and-answer And to over the the call operator we

Operator

[Operator from with our Capital first Staley John question Instructions] We'll take Staley Advisers.

John Staley

very process, up Bill, wrapped how have this as frustrating. not don't Yes. settled. find frustrating, is I you I and understand probably

a Rican Puerto preface or by roadblocked the difference you government the layperson, whatever the that the between this PREPA different agreement sitting the you mean had or the to explain committee was before guys than Puerto there is to exposures I'm there by stands itself, you Circuit, being stands ability there be wrapped rule. oversight you up even resolved yet And before curious, withdrew I hell about all other other a that guarantees by difference? yet assemble just and as something that many there's So from the I to think PREPA the and issue by exposures, XXth unable is. up. and how other court What Rico out would the conditional even

William Fallon

John, you're in credits correct. first had large Rico. X of insured There that Puerto all, we were absolutely

passed And long but prior Board which sort and and thought been people agreement have into went that so as initial highway, there probably Oversight it's too have And was resolved. were years law that the been That to know, of GO, And call, X chose just approve effect PROMESA, in to in X an the the the that was you actually resolved. recall, to to all this you size not the fill the first of were PREPA. interesting credits obviously ago. Congress who the it's was PREPA X cover what should COFINA the place there many approximately in of agreement. which to And similar

here bondholders. won't going been lots heard first been large time. things a I I to in agreed we've however, during it's so period the we process. Circuit people have be that, favorable decision for we situation; should and the this of but prior are, couple almost So board to restructured that there sit, there's opinions months the bore The the with is it's a of a I you years long be as has continuation years, was to And one. creditors very why first one this last here to have the all as X thought we've been many probably said, at was of that of now been ago the to of for Board where this suppose X and there and forbear was terms of difficult. this it to this credits

period. Judge like has XX-day We're the lot you requested mediation the about me, are. parties frustrated what whole Swain through halfway I'm a trust you, mediation. know, sure there's that this situation. And we'll of But see to As of results

John Staley

of the is really you tremendous our mean, What I your parties and rights allow to politicians no guarantee. What these difference the It Oversight of appointed lawyers the even their revenue, to the hat who's mean, dean hanging are assume or school not nothing are the issue? damn there's teat. that terms of Board who guaranteed but public I some is the off guy on? thing. I within guys damn substantive et But they're wouldn't guys -- a thing. against the in terms They're resolve not sucking be and have cetera. independent

they're So that We you X I it it makes ones. I I mean, this, settled yet settle let to don't sense other is no me. can't you What mean get it. contending?

William Fallon

articulated different several expressed John, have in many what creditors I you the years. just think over ways of

that be but Judge strongly it as to have on situation. and many up, of looks decisions make That's this opportunity of that believe resolution by are Decisions to it or may though consensual, to has forces it finally go where system going even be what courts, We this looks as through First further though there's one may right? court made the that either for influenced by is one be these the ended a have clarification. it Circuit good appeal. the Swain by the So to

John Staley

And that court days? process XX another is had you

William Fallon

this requested. What mediation That's hard after that just the happens to that point. at was predict is very

John Staley

that own at still like part or some still issue? the of Invesco hedge and the funds? people Golden who odds Is with other you Are some bonds something

William Fallon

the No. the We're now very majority aligned bondholders. of much with

group large all are a us of there's the trying to resolve So this aligned in terms that with of Board.

John Staley

thing this it's keeping wrapped So literally board up. disappointed oversight that's being

William Fallon

and is in a that, see compromise Swain have as they're would Judge probably different a to there that indicated, And bondholders complicated court, position little bit a we'll some like view. she would holders possible. be hope end but in her that to their whether to staking their more that's resolution the It's could and wait have this offer and than bond out what but

Operator

next our take from Instructions] Private [Operator will question We [indiscernible] Investor.

Unknown Attendee

Just a about One authorization? still repurchase is is, remaining there questions. the million couple of $XX under

William Fallon

Yes.

Unknown Attendee

buy have begin any to intention to you do back stock? Okay. And

William Fallon

at things, Evan, obligations including we've holding the ] of continue before, -- the lots look we the to different liquidity company, As said [ the holding of company.

we As is what do actually in the the We'll company. holding to some the time, stock, debt did will at in liquidity Joe second future we that back in And then use quarter. buy best if look back indicated, have the done think of we've the we point to we will any buy be as that past. choice that at

Unknown Attendee

wanted I bit ] still expenses in operating it's the but down check little to Okay. [ -- so QX, million. $XX a came

credits, point, within fairly PREPA -- So rate. and that's that run absent there's mean, no right, high Alexandria, problem basically mean I a $XX LCOR seems Nashville. at million possibly for this I really

William Fallon

situation. I the think description a of that's reasonable

Unknown Attendee

expect we those to operating expenses come down? can So

William Fallon

we have while like on expenses. which the back, is at core, the down. liability for been also expenses, at old focused business as company. right, as mind, Keep trend think is operating runoff holding in if when the have situation well operating The the part continue to asset as go you as reducing of We those would well answer of a operating you I the management we reduce expenses, to look

some to are very are those which down. down. already to committed we think on continue bring next so, things we'll those over get year There So the or continuing focused we've to, we expenses

Unknown Attendee

the PREPA so just mid-XXs? mark PREPA, And mean, you've terms like Okay. the looks in then down in of I it

William Fallon

is question? a I'm that sorry,

Unknown Attendee

Yes. is wherever resolution so out? that's for that our mean I mean kind a bogey comes settlement basically, or I -- a of

William Fallon

Yes. the level We've never of PREPA what actually communicated exactly recovery reserves reflect.

Unknown Attendee

there don't PREPA, reserves other But significant Okay. I think than National, I at mean are right?

William Fallon

fair is would reserves. that conclude of It be the our significant given portfolio portion PREPA our to

Unknown Attendee

can finally, what's you some on in Okay. And going Alexandria? just provide then idea just LCOR

William Fallon

right? point, , whole can space. classified say a of not I at It's there's one You'll our Well, it's credits, Yes. as see this right? listed office

the know everyone This in office think cities. with major what area. space D.C. has in around is happened I most and one

not on been We that that in a and this plan focused think resolution company will result this while, at in will quite have to have on a point. there place any a impact it the we is for material

Unknown Attendee

that synthetic look wonder if opportunity then finally, at portion there's market. the I -- you've transfer National market. wanted something -- Okay. And see where the lot to just in risk a transferring explored an credit with to of to of a I the Is activity transfer portfolio there's that synthetic risk

William Fallon

aware There on commenting are that any of obviously at of lots national any Without well the look point the synthetic time. regard at to market. portfolio are specific in with thing, things we we

we ever our So it. beneficial to shareholders, something if was that there would would felt pursue we be

Operator

[Operator Instructions]

any no turn further over like to this remarks. At I'm showing closing back questions. time, management the to for I'd floor or additional

Greg Diamond

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

recommend mbia.com in Good for additional We on MBIA. at information you that and your also website interest for goodbye. you the company. Thank day, visit our

Operator

Ladies you. does Conference today's this conclude Quarter gentlemen, XXXX Call. Results Thank Financial Second and MBIA

and You wonderful may a have lines, now disconnect your day.

MBIA (MBI) 7 Aug 242024 Q2 Earnings call transcript