Q3 2024 MBIA Inc Earnings Call
Hello.
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Unknown Attendee: And please stand by, your program is about to begin. Welcome to the NBIA Inc. 3rd Quarter 2024 Financial Results Conference Call.
By your program is about to begin.
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Yeah.
Welcome to the MBIA, Inc. Third 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.
Gregory Diamond: I would now like to turn the call over to Greg Diamond, Managing Director of Investor and Media Relations at NBIA. Please go ahead.
Gregory Diamond: Thank you, Ashley. Welcome to NBIA's conference call for our third quarter 2024 financial results. After the market closed yesterday, we issued and posted several items on our websites, including our financial results, 10-Q, quarterly operating supplement, and statutory financial statements for both NBIA Insurance Corporation and National Public Finance Guarantee. We also posted updates to the listings of our insurance companies insured portfolio.
Greg Diamond: Thank you Ashley welcome to Mbia's conference call for our third quarter 2024 financial results after.
Greg Diamond: After the market closed yesterday, we issued and posted several items on our websites, including our financial results 10-Q quarterly operating supplements and statutory financial statements for both MBIA Insurance Corporation and National Public Finance guarantee Corporation.
Greg Diamond: We also posted updates to the listings of our insurance companies insured portfolios rigs.
Gregory Diamond: Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K, 10-Q, and other SEC filings, as our company's definitive disclosures are incorporated in those documents. We urge investors to read our 10-K and 10-Qs, and they contain our most current disclosures about the company and its financial and operating results. Those documents also contain information that may not be addressed on today's call. Definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K and 10-Qs, as well as our financial results report and our quarterly operating.
Greg Diamond: Regarding today's call. Please note that anything said on the call is qualified by the information provided in the company's 10-K, 10, Qs and other SEC filings as our company's definitive disclosures are incorporated in those documents.
We urge investors to read our 10-K and 10-Qs and they contain our most current disclosures about the company and its financial and operating results.
Greg Diamond: Those documents also contain information that may not be addressed on today's call.
Definitions and reconciliations of the non-GAAP terms included in our remarks. Today are also included in our 10-K and 10-Qs as well as our financial results report and our quarterly operating supplement.
Unknown Attendee: recorded replay of today's call will become available on the NBIA website approximately two hours after the end of the call.
Greg Diamond: The recorded replay of today's call will become available on the N V. I a website approximately two hours after the end of the call.
Gregory Diamond: Now here's our safe harbor disclosure. Our remarks on today's conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause our actual results to differ materially from the projected results referenced in our forward-looking statement. Risk factors are detailed in our 10-K and 10-Qs, which are available on our website at mbia.com. Company cautions not to place undue reliance on any such forward-looking statement. Company also undertakes no obligation to publicly correct or update any forward looking statement if it later becomes aware that such statement is no longer active.
Speaker Change: Now here's our safe Harbor disclosure statement.
Our remarks on today's conference call May contain forward looking statements important factors, such as general market conditions and the competitive environment.
Speaker Change: Could cause our actual results to differ materially the projected results referenced in our forward looking statements.
Risk factors are detailed in our 10-K and 10-Qs which are available on our website at MBIA Dot com.
Speaker Change: Company cautions not to place undue reliance on any such forward looking statements.
Speaker Change: He also undertakes no obligation to publicly correct or update any forward looking statement. If it later becomes aware that such statement is no longer accurate.
Unknown Attendee: For our call today, Bill Fallon and Joe Schachinger will provide introductory comments and then a question and answer session will follow.
Speaker Change: For our call today, Bill Fallon and Joe Shan <unk> will.
Speaker Change: <unk> will provide introductory comments and then a question and answer session will follow now here is bill Fallon. Thanks.
William Fallon: Now, here's Bill Fallon. Thanks, Greg. Good morning, everyone. Thanks for being with us today. For our third quarter 2024 financial results, our revenues and expenses both improved compared with last year's third quarter, which yielded a lower net loss than last year. Revenues were higher largely due to lower losses related to variable interest entities associated with MBI Insurance Corp. and expenses were lower largely due to lower loss and loss adjustment expense associated with Nationals PEPA exposure.
Bill Fallon: Thanks, Greg Good morning, everyone, thanks for being with us today.
Bill Fallon: For our third quarter 2024 financial results, our revenues and expenses, both improved compared with last year's third quarter, which yielded a lower net loss in last year's third quarter.
Bill Fallon: Revenues were highly higher largely due to lower losses related to variable insurance.
Bill Fallon: Interest entities associated with MBIA insurance Corp, and expenses were lower largely due to lower loss and loss adjustment expense associated with National's PREPA exposure.
William Fallon: Regarding PREPA, mediation has been extended to January 31st of next year. In the meanwhile, the parties in mediation are waiting for the decision from the First Circuit Court of Appeals as to whether they will re-hear arguments regarding their ruling earlier this year that determined PREPA bondholders' rights included a lien on PREPA's net revenue. Given the uncertainty associated with the possible outcomes for nationals prep a bankruptcy claim in excess of $800 million. We expect that substantially reduced uncertainty regarding the PREPA outcome will likely be needed before we can restart the process to sell the company. Regarding the balance of Nationals Insured Portfolio, those credits have continued to perform generally consistent with our expectations.
Bill Fallon: Regarding PREPA.
Bill Fallon: Mediation has been extended to January 31st of next year.
Bill Fallon: In the Meanwhile, the parties in mediation or waiting for the decision from the first circuit court of appeals as to whether they will we hear arguments regarding their ruling earlier this year that determined PREPA bondholders rights included a lien on purpose net revenues.
Bill Fallon: Given the uncertainty associated with the possible outcomes for nationals PREPA bankruptcy claim in excess of $800 million.
Bill Fallon: We expect that substantially reduced uncertainty regarding the PREPA outcome will likely be needed before we can restart the process to sell the company.
Bill Fallon: Regarding the balance of nationals insured portfolio. Those credits have continued to perform generally consistent with our expectations.
William Fallon: The Gross Paramount Outstanding Financials Insured Portfolio has declined by approximately $2.5 billion from year-end 2023 to about $26 billion at the end of the third quarter of this year. Nationals leverage ratio of gross part of statutory capital is 26 to one at the end of the third quarter of 2024. As of September 30th, 2024, National had total claims paying resources of $1.6 billion. Statutory Capital and Surplus of $1 billion.
The gross par amount outstanding for National's insured portfolio has declined.
Bill Fallon: Approximately $2 $5 billion from year end 2023 to about $26 billion at the end of the third quarter of this year.
Bill Fallon: National's leverage ratio gross par to statutory capital was 26 to one at the end of the third quarter of 2024.
Bill Fallon: As of September 32024 National had total claims paying resources of $1 $6 billion, it's actually statutory capital and surplus of $1 billion.
Joseph Schachinger: Now Joe will provide additional comments about our financial results.
Speaker Change: Now Joe will provide additional comments about our financial results.
Joseph Schachinger: Thank you, Bill. And good morning, all. I will begin with a review of our third quarter 2024 gap and non gap results and then provide an overview of our statutory results. The company reported a consolidated gap net loss of $56 million or a negative $1.18 per share for the third quarter of 2024 compared to a consolidated gap net loss of $185 million. or a negative $3.94 per share for the third quarter of 2023.
Joe Shan: Thank you Bill and good morning all.
Joe Shan: I will begin with a review of our third quarter 2024, GAAP and non-GAAP results and then provide an overview of our statutory results.
Joe Shan: The company reported a consolidated GAAP net loss of $56 million or a negative $1 18 per share for the third quarter of 2024.
Joe Shan: Compared to a consolidated GAAP net loss of $185 million or a negative $3 94 per share for the third quarter of 2023.
Joseph Schachinger: The lower gap net loss of this quarter was largely driven by two items. First is Lower Lawson-Elliott National. In the third quarter of 2023, higher loss in LAE was primarily the result of updating our range of recoveries for PREPA under the then amended PSA. In the current quarter, loss in LAE was primarily driven by accretion of our reserves and recovery.
Joe Shan: The lower GAAP net loss this quarter was largely driven by two items.
Joe Shan: First as lower loss and early yet national in.
Joe Shan: In the third quarter of 2023 higher loss in LAE was primarily the result of updating our range of recoveries for PREPA under that then amended Psa.
Joe Shan: In the current quarter loss and LAE was primarily driven by accretion of our reserves and recoveries.
Joseph Schachinger: And the second item is lower losses related to consolidated VIEs at MBI Insurance. In the third quarter of 2023, VIE losses primarily related to the early redemption of VIE liabilities insured by MBI Insurance Corp. and the deconsolidation of a VIE with no comparable activity in the current quarter.
Joe Shan: And the second item is lower losses related to consolidated <unk> at MBIA Insurance Corp.
Joe Shan: In the third quarter of 2023 V. I a loss is primarily related to the early redemption of V. I a liabilities ensured by MBIA insurance Corp, and the deconsolidation of a V I E with no comparable activity in the current quarter.
Joseph Schachinger: The company's adjusted net loss, a non-gap measure, was $174,000, or essentially $0.00 per share, for the third quarter of 2024. compared with an adjusted net loss of $138 million or negative $2.92 per share for the third quarter of 2023. Favorable change was primarily due to the lower loss in LAE at national in the current quarter related to prep During the first nine months of this year, NBIA Inc.'s book value per share decreased $6.63 to a negative $39.19 per share as of September 30, 2024. versus a negative $32.56 per share as of December 31st, 2023. This decrease was primarily due to our $396 million consolidated net loss for the 2024 year to date period.
Joe Shan: The company's adjusted net loss, a non-GAAP measure was $174000 or essentially $0 and cents per share for the third quarter of 2024.
Joe Shan: Compared with an adjusted net loss of $138 million or negative $2.92 per share for the third quarter of 2023.
Joe Shan: Favorable change was primarily due to the lower loss in L. A yet national in the current quarter related to PREPA.
Joe Shan: During the first nine months of this year.
Joe Shan: And B I E inks book value per share decreased $6.63 to a negative $39 19 per share as of September 30th 2024.
Joe Shan: Versus a negative $32 56 per share as of December 31st 2023.
Joe Shan: This decrease was primarily due to our 396 million dollar consolidated net loss for the 2024 year to date period.
Joseph Schachinger: Included in MBI Inc.'s book value as of September 30, 2024, is a negative $48.80 per share of MBI Insurance Corp.'s book value. versus a negative $44.91 per share as of December 31, 2023.
Joe Shan: Included in MBIA, Inc. 's book value as of September 30th 2024 is a negative $48 80 per share of MBIA insurance Corp to book value.
Joe Shan: Versus a negative $44 91 per share as of December 31, 2023.
Joseph Schachinger: I will now spend a few minutes on our corporate segment balance. The corporate segment, which primarily comprises the activities of the holding company, MBIA Inc., had total assets of approximately $646 million as of September 30, 2024. Within this total are the following material assets. Unencumbered cash and liquid assets held by NBIA Inc. totaled $326 million, compared with $411 million as of December 31, 2023. The decrease was largely due to spending approximately 78 million dollars in the first and second quarters of 2024 on retiring GFL denominated, sorry, GFL Euro denominated medium term note liabilities and purchasing NBI Inc.
Joe Shan: I will now spend a few minutes on our corporate segment balance sheet.
The corporate segment, which primarily comprises the activities of the holding company MBIA, Inc. Had total assets of approximately $646 million as of September 30th 2024.
Joe Shan: Within this total are the following material assets.
Joe Shan: Unencumbered cash and liquid assets held by MBIA, Inc totaled $326 million compared with $411 million as of December 31, 2023.
Joe Shan: The decrease was largely due to spending approximately $78 million in the first and second quarters of 2024 on retiring G. F. L denominated sorry, GFS Euro denominated medium term note liabilities and purchasing MBIA, Inc. Senior notes before there.
Joseph Schachinger: senior notes before their maturity. As noted in prior quarters, both the medium term notes and senior notes were purchased at prices accretive to equity. In addition to the unencumbered cash and liquid assets, Corporate segments assets included approximately $211 million of assets at market value pledged to guaranteed investment agreement contract holders which fully collateralized those contracts.
Joe Shan: Maturities.
Joe Shan: As noted in prior quarters, both the medium term notes and senior notes were purchased at prices accretive to equity.
In addition to the unencumbered cash and liquid assets at the corporate segment assets included approximately $211 million.
Joe Shan: Assets at market value pledged to guaranteed investment agreement contract holders, which fully collateralize those contracts.
Joseph Schachinger: Now turning to the insurance company's statutory results. national reported statutory net income of $19 million for the third quarter of 2024 compared to a statutory net loss of $133 million for the third quarter of 2023. The favorable variance was primarily driven by the lower loss in LAE related to its PREPA exposure. National statutory capital as of September 30, 2024 was $1 billion. down $117 million compared with December 31st, 2023. largely due to its statutory net loss for the 2024 year-to-date period of $123 million. Claims paying resources were $1.6 billion, down $95 million from December 31, 2023.
Joe Shan: Now turning to the insurance company's statutory results.
Joe Shan: National reported statutory net income of $19 million for the third quarter 2024, compared to a statutory net loss of $133 million for the third quarter of 2023.
Joe Shan: The favorable variance was primarily driven by the lower loss in LAE related to its PREPA exposure.
Joe Shan: National's statutory capital as of September 32024 was $1 billion.
Joe Shan: Down $117 million compared with December 31, 2023.
Joe Shan: Largely due to its statutory net loss for the 2024 year to date period of $123 million.
Joe Shan: Claims paying resources were $1 $6 billion down $95 million from December 31, 2023.
Joseph Schachinger: As of September 30, 2024, National had gross par outstanding of $26 billion, which is down about $2.5 billion from year-end 2023. This decrease was largely due to regular amortization of nationals insured portfolio.
Joe Shan: As of September 30th 2024 National had gross par outstanding of $26 billion, which is down about two $5 billion from year end 2023.
Joe Shan: This decrease was largely due to regular amortization of National's insured portfolio.
Joseph Schachinger: Now I'll turn to MBI Insurance Corp. NBIA Insurance Corp reported statutory net income of $2 million for the third quarter of 2024, compared to a statutory net loss of $14 million for the third quarter of 2023. A small loss in L.A. benefit this quarter helped drive net income. An increase in loss reserves on RMBS and ABS-CDO exposures primarily drove the net loss in the third quarter of 2023. As of September 30, 2024, the statutory capital of MBI Insurance Corp. was $87 million, down from $152 million at year-end 2023, primarily due to its net loss for the 2024 year-to-date period of $68 million.
Joe Shan: Now I'll turn to MBIA insurance Corp.
Joe Shan: MBIA Insurance Corp reported statutory net income of $2 million for the third quarter of 2024 compared to a statutory net loss of $14 million for the third quarter of 2023.
Joe Shan: A small loss in L. A benefit this quarter helped drive net income.
Joe Shan: An increase in loss reserves on our MBS and ABS CDO exposures, primarily drove the net loss in the third quarter of 2023.
Joe Shan: As of September 30th 2024.
Joe Shan: <unk> capital of MBIA Insurance Corp was $87 million down from $152 million at year end 2023, primarily due to its net loss for the 2024 year to date period of $68 million.
Joseph Schachinger: Claims paying resources totaled $358 million at September 30, 2024, compared to $504 million at year-end 2023. NBIA Insurance Corp's insured gross par outstanding was $2.5 billion as of September 30, 2024, down about 13% from year-end 2023.
Joe Shan: Claims paying resources totaled $358 million at September 32024, compared to $504 million at year end 2023.
Joe Shan: MBIA insurance Corp's insured gross par outstanding was $2 $5 billion as of September 30th 2024.
Joe Shan: Down about 13% from year end 2023.
Unknown Attendee: The decrease in claims paying resources and gross par outstanding is partially driven by our proactive de-risking of exposures for which we held reserves and were paying claims. And now we will turn the call over to the operator to begin the question and answer session. Certainly, if you have a question at this time, please press star one on your telephone keypad. If you wish to remove yourself from the queue, press star two. We ask that when posing your question, you please pick up your handset to allow optimal sound quality. We will pause a moment to allow any questions to queue.
The decrease in claims paying resources and gross par outstanding was partially driven by our proactive derisking of exposures for which we held reserves and were paying claims.
Speaker Change: And now we will turn the call over to the operator to begin the question and answer session.
Speaker Change: Certainly if you have a question at this time. Please press star one on your telephone keypad, if you wish to remove yourself from the queue Press star two we ask that when posing your question you. Please pickup your handset to allow optimal sound quality.
Speaker Change: We'll pause a moment to allow any questions. Thank you.
Thomas McJoynt: We will take our first question from Tommy Mcjoynt with KBW, please go ahead. Hey, good morning, guys. Thanks for taking my questions. So with a billion dollars of capital at National, how much of that do you consider excess? And are you seeking approval to release any of that capital? It was it was around this time last year that National got approval for the substantial capital release.
Speaker Change: We will take our first question from Tom and Mick joined with <unk>. Please go ahead.
Speaker Change: Hey, good morning, guys. Thanks for taking my questions.
Speaker Change: So with a $1 billion of.
Speaker Change: With capital at National.
Speaker Change: How much of that do you consider excess and are you seeking approval to release any of that capital. It was it was around this time last year that national got approval for the substantial capital release.
William Fallon: Yeah, Tommy, thank you for the question. Given that we don't focus on ratings anymore, we don't necessarily do a calculation in terms of what the excess capital is the way perhaps other companies do. What we do focus on, as you referred to, is trying to get extraordinary dividends when it's appropriate, which we did last year at this time.
Yeah, Tommy Thank you.
Speaker Change: The question.
Speaker Change: Given that we don't focus on ratings anymore.
We don't necessarily do a calculation in terms of what the excess capital that is the way perhaps other companies do.
Speaker Change: Well, what we do focus on as you referred to.
Speaker Change: It's trying to get extraordinary dividends when its appropriate which we did last year. At this time now we do have the annual as of right dividend that will be paid before the end of the year.
William Fallon: Now, we do have the annual as-of-right dividend that will be paid before the end of the year.
Speaker Change: But I think at this point given the extraordinary dividend last year, we want to make sure that there's further progress on Puerto Rico.
William Fallon: But I think at this point, given the extraordinary dividend last year, we want to make sure that there's further progress on Puerto Rico before we engage in any discussions with the Department.
Speaker Change: Before we engage in any discussions with the department.
Thomas McJoynt: Okay, got it.
Speaker Change: Okay got it.
Thomas McJoynt: And if I look at the disclosures, so National paid a gross claim on on July 1st of 24 of $122 million on PREPA. And it looks like the National's insurance loss recoverable increased by $57 million. So that looks like that equates to you guys assuming a 47% recovery on that claim paid. Is that the right math to think about? Or are there any other inputs?
Speaker Change: And if I looked at the disclosure so national poll.
Speaker Change: Gross claim.
Speaker Change: On July.
Speaker Change: 24 of $122 million on top of that and it looks like the National's insurance loss recoverable increased by $57 million. So that looks like that equates to you guys, assuming a 47% recovery on that claim paid is that the right math to think about are there any other inputs to consider.
William Fallon: Yeah, well, we don't comment exactly on what the number is, the approach that you're taking is very logical and reasonable. Thank you.
Speaker Change: Yes, well, we don't comment exactly on what the number is the approach that you're taking is very logical and reasonable.
Speaker Change: Thank you.
Speaker Change: Thank you we will take our next question from Jordan Hymowitz with Philadelphia Financial. Please go ahead.
Jordan Hymowitz: We will take our next question from Jordan Hymowitz with Philadelphia Financial. Please go ahead. Hey guys, can you hear me okay? We can hear you fine, Jordan. Great, thank you. Um, you commented that you're not looking to reengage the process of selling the company, which you've tried a couple times until Puerto Rico was greater clarity. I guess my question is why? I mean, there's different ranges of Puerto Rican outcomes that can be evaluated in different pack end payments, depending on resolutions. I mean, there's a huge there's obviously as competitor a continues to go up in price, there's more value to their stock, you're losing value there.
Jordan Hymowitz: Hey, guys can you hear me okay.
Speaker Change: We can hear you fine Jordan.
Speaker Change: Thank you you commented that you are not looking to re engage the process of selling the company, which you've tried a couple of times until Puerto Rico was greater clarity I guess my question is why I mean, theres different ranges of Puerto Rican outcomes that can be evaluated and different.
Speaker Change: Ken payments, depending on resolutions I mean, theres a huge there's obviously.
Speaker Change: Competitor a continues to go up in price there is more value to their stock youre, losing value there why not engaged now with some sort of structure that if the resolution is more favorable there's a greater backend payment.
Jordan Hymowitz: Why not engage now with some sort of structure that if the resolution is more favorable, there's a greater back end payment. I mean, it just seems like you've got a very valuable franchise, the market has the competitors either private or some the one that's are public as a capital, why not engage them?
Speaker Change: It just seems like you've got a very valuable franchise. The market has the competitors either private or some the one that's all public.
Speaker Change: Public has the capital why not engaged now.
William Fallon: The approach you described is one that we have considered and is a real possibility. The reality is the feedback that we've received to date would suggest that it would not be beneficial for our shareholders. But that doesn't mean that things don't change at any point in time. So it is always a possibility in terms of the approach you described. Okay, I mean, it's tough to know once you get into the negotiating room as what but it does seem because it's most likely to be a stock deal that the ratios are unbelievably powerful. And you should have some leverage with with what the outcome is.
Speaker Change: The approach you describe is one that we have considered and is a is a real possibility. The reality is the feedback that we've received to date.
Speaker Change: I would suggest that it would not be beneficial for our shareholders, but that doesn't mean that things don't change at any point in time. So it is always a possibility in terms of the approach you described.
Speaker Change: Okay.
Speaker Change: Now once you get into the negotiating room, that's what but.
Speaker Change: It does seem because it is most likely to be a thought the elder the ratios are unbelievably Ara fall.
Speaker Change: And you should have some leverage with the with what the outcome as soon as the shareholder now for.
William Fallon: And as the shareholder now for, you know, most of the past three or four years, it just seems like a great opportunity to see if there's an interest in exploring that because we're getting closer. And with the governor of Puerto Rico being elected, who wants to resolve a lot of things, it's more likely that something could come to fruition and then it'd be a win win for everybody. Yeah, Jordan, we agree. We think the sooner this can all be resolved, it will be better for our shareholders. And so that's what we're focused on as well.
Speaker Change: Most of the past three or four years. It just seems like a great opportunity to see if there is an interest in exploring that because we're getting closer and with the governor of Puerto Rico being elected who wants to resolve a lot of things, it's more likely that something could come to fruition and that would be a win win for everybody.
Jordan Hymowitz: Yes, Jordan, we agree we think the sooner. This can all be resolved it will be better would be better for our shareholders and so that's what we're focused on as well.
Jordan Hymowitz: Okay, thanks for you for at least considering it and thank you for taking my question. Thank you.
Speaker Change: Okay. Thanks to you for at least considering it and thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: Thank you we will take our next question from John Staley with Daily Capital Advisors. Please go ahead.
John Staley: We will take our next question from John Staley with Staley Capital Advisors. Please go ahead. Thank you, Bill, sort of a follow up on the last comment that was made with the election of Trump. given the fiasco Madison Square Garden with the rogue comedian. and the presence, not widely appreciated. General public, but certainly by politicians. But given the presence within the Puerto Rican government of significant Republican positions, I forgot if it's the president or somebody very high up, but there's more than one major. Republican involved in the Puerto Rican administration. And it seems to me that Trump, given what happened with Madison Square Garden, would like to get this situation resolved a hell of a lot more than Kamala Harris would ever care.
Thank you.
Speaker Change: Built sort of a follow up on the last comment that was made.
Speaker Change: With the election of Trump.
Speaker Change: Given.
Speaker Change: <unk> Madison Square gardens, with the rugs comedian.
Speaker Change: And the presence.
Widely appreciated by general public, but certainly by politicians.
Speaker Change: Given the presence within the Puerto Rican government.
Speaker Change: Republic.
Speaker Change: Physicians I forgot it was all right.
President or somebody very high up.
Speaker Change: More than one major.
Speaker Change: Republican involved in our Puerto Rican administration.
Speaker Change: And it seems to me that Trump given what happened in Madison Square Garden wed like to get this situation resolved a hell of a lot more than from Iris will never cared about right.
John Staley: But I'm curious if you see a path. or Trump might just dismiss the Oversight Board. and let you get this resolved with the Puerto Rican government. and the adversary parties in this to get the Puerto Rican people in a position where they can get back to financing things and getting things done. I think this is a great message. Unknown Attendee That might. be heard favorably by Trump as a very positive move for the Puerto Rican people. I'm curious, one, if your reaction to whether you see that avenue. Yeah, John, again, thank you for your your call and your interest.
Speaker Change: Great.
Speaker Change: Curious.
Speaker Change: Right.
Speaker Change: Do you see a path.
Speaker Change: Sure Mike just dismiss the oversight board.
You get this resolved with support from government.
Speaker Change: And the adversary parties in this to get the.
Speaker Change: Puerto Rican people in a position where they can get back to finance these things and getting things done.
Speaker Change: I think this is it.
Speaker Change: A great message.
Speaker Change: Right.
Speaker Change: We heard favorably by Trump.
Speaker Change: Alright positive move for the Puerto Rican people I'm curious what is your reaction to revenue.
Speaker Change: See that avenue or not.
Speaker Change: Yes, John again, thank you for your call and your interest.
William Fallon: Given the events of this week with the election and everything you just described, while we have been looking for a catalyst to help resolve this now for as you know, many years, so if in fact, Trump's approach, this would be one that would move us towards that end, we would, we would be very much supportive of that approach. So I think it's going to take a little bit of time. Obviously, he was just elected this week. Same thing with the new governor of Puerto Rico. We have heard some early comments very much along the lines that you've been describing, my guess is over the next few weeks, and you know, into January, when he actually takes office, we may get a better sense of whether this really is a catalyst to resolving this much quicker than perhaps the current path that we're on, which again, we think would be very much appreciated and would be good for our shareholders.
Speaker Change: Given the events of this week with the election and everything you just described.
Speaker Change: We have been looking for a catalyst to help resolve this now for as you know many years, so even faster.
Speaker Change: <unk> approached this would be one that would move us towards that end.
Speaker Change: We would we would be very much supportive of that approach. So I think it's going to take a little bit of time.
Speaker Change: Obviously he was just elected this week same thing with the new governor of.
Speaker Change: Puerto Rico, we have heard some early comments very much along the lines that you've been describing and my guess is over the next few weeks and into January when he actually takes office.
Speaker Change: They get a better sense of whether this really as a catalyst to resolving this much quicker than perhaps the current path that Ron which again.
Speaker Change: We think would be very much appreciated and would be good for our shareholders.
Unknown Attendee: And that governor you're talking about, isn't she a Republican? The answer is yes, you may, it's slightly different, but the answer, the short answer is yes. Thank you. Thank you very much. I think that's a very positive development in terms of getting this resolved. I mean, keeping this with the Oversight Board, judges and lawyers is just nothing. It has been a very long process, we agree with you. Amen. All right. Thank you. And as a reminder, that is star one for your questions.
Speaker Change: And that governor you're talking about this and share Republican.
Speaker Change: Hum.
Speaker Change: The answer is yes, you may it's slightly different but the answer the short answer is yes.
Speaker Change: Thank you very much.
Speaker Change: That's a very.
Speaker Change: Positive development in terms of getting this resolved.
Speaker Change: This with the oversight board judges and lawyers is just nuts.
Speaker Change: It has been a very long process, we agree with you.
Speaker Change: Alright, thank you.
Thank you and as a reminder, that is star one for your questions.
Carlos Ardo: We will take our next question from Carlos Ardo with Private Investor. Please go ahead. Hi, good afternoon from London. Thanks again for the December D-event and also for the time that summer going through different options. I have a couple of questions regarding our CEPA code with the golden trees in Cora and Assurd. My understanding is that the code was extended in August until March 2025. Is that correct? Is that the maturity at the moment? I'm sorry, Carlos. Could you repeat the question? We couldn't quite hear you here. Yes. The code, yes, the code with content trees in Cora and Azur, was extended in August until March 2025.
Speaker Change: We will take our next question from Carlos <unk> with private Investor. Please go ahead.
Speaker Change: Hi, good afternoon from London, Hey, Thanks, taking maybe Sandra Thank you Ben.
Speaker Change: So for the time that some are going to be fare options I have a couple of questions if I could.
Speaker Change: Well the increase in Colorado.
Speaker Change: My understanding is that they call what is pending.
Until March 25 is that correct.
Speaker Change: At the moment.
Speaker Change: I'm sorry could you repeat the question, we Couldnt quite hear you here, Yeah, that's cool coke with coffee trees and color I'm not sure why you suspended in.
Speaker Change: March 2025.
William Fallon: This is the, at the moment, when it expires. What do you, what is something about Golden Tree and expiration? The co-op, yes, the agreement to a co-op, a cooperation agreement with Golden Tree, Sincora, and Azul. Oh. And my understanding is that it must be suspended in August until March 2025, which is the situation at the moment. Okay. Great. Okay. Yes, we are part of a cooperation. Yes, Carlos, we are part of a cooperation agreement with the other bondholders that was extended into next year. That's correct. Until March. Correct. Perfect. And could we walk away from that call before March 2025?
Speaker Change: In a moment.
What has expired.
Speaker Change: What do you what does something about Golden tree and exploration costs, yes. Thank you Anthony.
Speaker Change: I called a cooperation agreement with Golden tree, some color on our quarterly calls.
Speaker Change: My understanding.
Speaker Change: And then in August.
Speaker Change: Through March 2025.
At the moment, yes.
Speaker Change: Yes, we are part of our cooperation yes, Carlos we are part of our cooperation agreement with the other bond holders that was extended into next year. That's correct that's correct.
Speaker Change: Back in March.
Correct.
Speaker Change: Okay.
Speaker Change: Could we broke away from back Cook before remarks would be 25 or <unk>.
William Fallon: Or if someone offers better terms? Or are we are we tied to that call? The question is, are we tied? Walk away. We have the ability to do that. Could we walk away, or are we obliged to stay in the co-op? At this point, we've agreed to work together with the other bondholders who are part of that agreement. As with all these agreements, I suppose you could come up with a scenario where something were to change that. But that is the approach that we're taking. We are in agreement with them, we're working with them. We cannot sell our exposure until March, then, I assume.
Speaker Change: It's somewhat of a perfect. Okay. So where are we are we tie that cool.
Speaker Change: The question is are we tie walk away, we have the ability to quickly walk away or are we in the co op.
At this point, we've agreed to work together with the other bondholders you're part of that agreement.
With all these agreements I suppose you could come up with a scenario where something were to change that but that is.
Speaker Change: The approach that we're taking we are in agreement with them, we're working with them.
Speaker Change: And we cannot sell our exposure until.
Speaker Change: And then I assume that we have to stick with.
William Fallon: We have to stick to the prep exposure until March? or can we turn it to third parties? We always have the right to sell our exposure. Unknown Attendee, Paul Saunders, Joseph Schachinger, Anthony McKiernan, John Staley, William Fallon, Yeah, I remember. Yeah. So there is nothing preventing us from finding a buyer for the solution. I believe that's correct, yes. Okay, perfect. And since our sponsor is very important to meet a certain set of all the thresholds, so basically the co-op, you know, only surpasses the 60% mark if we are in, what are we getting in exchange from the co-op in return for our support?
Speaker Change: A spokesman through March.
Speaker Change: Can we tell at Barclays.
Speaker Change: So we always have the right to sell our exposure.
Speaker Change: Uh huh.
Speaker Change: We still have this notion of what we.
Speaker Change: We sell a portion of our PREPA exposure years ago.
Speaker Change: Yes, I remember.
Speaker Change: So there is nothing preventing us from finding a buyer.
Speaker Change: A lot of exposure.
Speaker Change: I believe that's correct yes.
Speaker Change: Okay perfect.
Speaker Change: Alistair.
Speaker Change: Our sponsor is very strategically.
Speaker Change: Yes.
Speaker Change: Oh boy.
Speaker Change: So basically they call for it.
Speaker Change: I'll just go Pakistan, 50% Mark.
Speaker Change: If we are in what I would get to him as well.
Speaker Change: Within retail for all the support.
But are we getting from the co op group.
Carlos Ardo: will be getting from the co-op group. Unknown Speaker Are we just joining for free or do we get any kind of advantage? What I mean is that we have... The benefit is we have the benefit of large numbers in terms of the dollar amount or the proportion of the debt that is held by that group. Yes, I think that our percentage is very important because of the percentages of the co-op group and of the other groups, you know, we play a key role there. And then the last question is, how much work for any other co-op members is presented by our sponsors?
Speaker Change: In exchange for why we ask for.
Speaker Change: Or do we get any kind of advantage.
Speaker Change: Okay.
Speaker Change: We haven't.
Speaker Change: The benefit is we have the.
Speaker Change: The benefit of large numbers in terms of the dollar amount or the portion of the debt.
Speaker Change: That is held by that group.
Speaker Change: Yeah.
Speaker Change: Yes, yes.
Speaker Change: Yes, Duffy our present, thank you Paul.
Speaker Change: And because of that okay.
Speaker Change: Yes, I'll take off group I Hope you are as Luke.
Speaker Change: We play.
Speaker Change: Play a key role in there and then.
Speaker Change: The last question is how much more or any other member.
Speaker Change: Remember its pricing and buy in our disclosure.
Carlos Ardo: Unknown Attendee, Paul Saunders, Joseph Schachinger, Unknown Attendee, Paul Saunders, Unknown Attendee, I'm sorry, could you repeat the question, please? Okay, have you expressed any interest in buying our exposure? No, there's been very little trading of the bonds and the interest in buying claims. has diminished significantly over the last few years.
Speaker Change: First of all by ourselves because at the moment, we have $200 million market cap.
Speaker Change: It would be relatively easy for them to buy the whole company and I need to take.
Speaker Change: Inc.
Speaker Change: I'm, sorry could you repeat the cash liquidity of course yeah.
Speaker Change: Hi, Chris Thank you Jackie.
Speaker Change: Okay.
Speaker Change: No theres been very little trading of the bonds and.
Speaker Change: The interesting thing in buying claims.
Speaker Change: Has diminished significantly over the last few years.
Carlos Ardo: Yeah, well, I mean, my suggestion, of course, I discussed this with Greg back in July, you know, but my suggestion is that we should not extend this cooperation beyond March, unless we get something in return, because I feel that our system is very strategic in terms of, you know, the balance of power between the current COP, between COLA, Voluntary and Assure, and the the group that is led by black folks, you know, so, so I definitely, you know, I feel that if this goes beyond March, you know, I would, I would take a different approach.
Speaker Change: Yes.
Speaker Change: Martha.
Speaker Change: Of course, I, just got some sleep well correct back in July like myself, just yet that we should notwithstanding.
Speaker Change: <unk>.
Speaker Change: March unless we get something that would be fair because today.
Speaker Change: After he finishes.
Speaker Change: Please go ahead.
The balance of power between between their.
Speaker Change: Current cough and cold I wasn't.
Sure.
Speaker Change: The group that is led by Black book.
Speaker Change: It's not big.
Speaker Change: It is going to be John Martin.
Speaker Change: I would take a different approach.
William Fallon: That's my, that's my view on this. Okay, we appreciate that. We will take that into consideration. Okay, thank you. Thank you.
Speaker Change: That's my that's my view on this.
Speaker Change: Okay. We appreciate that we'll take that into consideration.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you we will take our next question from.
Jordan Hymowitz: We will take our next question from we do have a follow up from Jordan Hymowitz with Philadelphia Financial. Please go ahead. Hi, follow up to the gentleman's question right after mine, which I thought was excellent, about the new Governor Gonzalez. I mean, she put out a statement, and I quote, I will begin looking for a second operator for LUMA so that we can resolve the issues with the electrical system.
Speaker Change: Follow up from Jordan Hymowitz with Philadelphia Financial Please go ahead.
Speaker Change: Hi.
Speaker Change: Follow up to the Gentleman's question of right. After my window, there was absolute about the new Governor Gonzalez.
Speaker Change: She put out a statement and I quote I will begin looking for a second operator for luma.
Speaker Change: So that we can resolve the issues with the electrical system.
William Fallon: Does a second operator for loom in the electric system necessitate a resolution of PREPA and does that mean she might involve herself more in doing this so we can get cheaper power to the island? Well, with regard to the first that it doesn't mean that PREPA has to be restructured or that that issue has to be resolved for them to deal with operating issues, which is what LUMA effectively is. Your guess is as good as ours whether or not that statement indicates that she wants to get more involved. Prepa, not only in the operations of it, but also in the restructuring issues.
Speaker Change: This result does the second operator for aluminum the electric system necessitate a resolution of proper and does that mean she might involve resolve more.
Speaker Change: In doing this so we can get cheaper power to the island.
Speaker Change: Well with regard to the first.
Speaker Change: It doesn't mean that PREPA has to be restructured or that that issue has to be resolved for them to deal with operating issues, which is what room are.
Speaker Change: Effectively is.
Your guess is as good as ours, whether or not that statement indicates that she wants to get more involved.
Speaker Change: And perhaps are not only in the operations of it but also in the restructuring.
Speaker Change: Issues.
William Fallon: Let me phrase the question a different way, and I could be a little off here, and I apologize if I am, but does the lack of resolution of PRAPA in any way impede the construction or improvement of the new electrical power plants in Puerto Rico, or is it just a financial issue? We would suggest that they are tied together. There are certain things that can be done. Obviously, they need to operate PREPA in the absence of a resolution. But I think it's a reasonable conclusion that resolving the restructuring or effectively the bankruptcy would help facilitate the operational aspects of PREP.
Speaker Change: Let me phrase the question a different way and I could be a little off here and I apologize if I am but does the lack of resolution of proper in any way impede the construction or improvement of the new electrical power plants in Puerto Rico or is it just the financial issue.
Speaker Change: We would suggest that they are tied together there are certain things that can be done obviously, they need to operate PREPA and the absence of a resolution.
Speaker Change: But I think.
Speaker Change: It's a reasonable conclusion that resolving the restructuring or the effectively the bankruptcy.
Speaker Change: Would help facilitate the operational aspects of PREPA.
Unknown Attendee: Not to mention save a tremendous amount of money that's only being paid to lawyers and mediators instead of the working class Puerto Ricans who could benefit from lower energy costs. But that's a different political comment. I think everyone would agree with your statement, however. Thank you. I appreciate you taking my question. I would love to have a follow up call. Okay, thank you. Thank you and at this time I'm showing no further questions.
Speaker Change: Not to mention save a tremendous amount of money, that's only being paid to lawyers and mediators instead of the working class, Puerto Rican who could benefit from lower energy costs, but that's a different political comment.
Speaker Change: I think everyone would agree with your statement however.
Speaker Change: Thank you I. Appreciate you taking my question I would love to have a follow up call.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you and at this time Im showing no further questions I would like to turn the floor over to management for any additional or closing remarks.
Gregory Diamond: I'd like to turn the floor over to management for any additional or closing remarks. Thank you, Ashley, and thanks to everyone listening to the call today. Please contact us directly if you have additional questions. We also recommend that you visit our website at nbia.com for additional information about our company. Thank you for your interest in NBIA.
Speaker Change: Thank you Ashley and thanks to everyone listening to the call today.
Speaker Change: Please contact us directly if you have additional questions. We also recommend that you visit our website at MBIA Dot com for additional information about our company.
Speaker Change: Thank you for your interest in MBIA, Good day and Goodbye.
Unknown Attendee: Good day and goodbye. Thank you.
Speaker Change: Thank you. This does conclude today's program. Thank you for your participation you may disconnect at any time.
Unknown Attendee: This does conclude today's program. Thank you for your participation.
Unknown Attendee: You may disconnect at any time.
Speaker Change: Okay.
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Unknown Attendee: Jeb Huggins, https://www.youtube.com Unknown Attendee, Paul Saunders, Joseph Schachinger, John Staley, Anthony McKiernan, John Staley, and Greg Huffman and John Huffman and Paul Huffman and John Huffman and Paul
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