Q2 2025 MBIA Inc Earnings Call
Speaker #1: Please stand by. Your program is about to begin. Welcome to the MBIA INC second quarter 2025 financial results conference call. I would now like to turn the call over to Gregory amond, Managing Director of Investor and Media Relations of MBIA.
Speaker #1: Please go ahead, sir.
Speaker #3: Thank you, Erica. Yes, welcome to MBIA's conference call. 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 MBIA Insurance Corporation and National Public Finance Guarantee Corporation.
Speaker #3: We also posted updates to the listings of our insurance companies, insurance portfolios. 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.
Speaker #3: We urge investors to read our 10-K and 10-Qs, as they contain our most current disclosures about the company and its financial and operating results.
Speaker #3: Those documents also contain information that may not be addressed on today's call. The 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.
Speaker #3: The recorded replay of today's call will become available on the MBIA website approximately two hours after the end of the call. Now, here is our Safe Harbor disclosure statement.
Speaker #3: 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 statements.
Speaker #3: Risk factors are detailed in our 10-K and our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements.
Speaker #3: The 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 accurate.
Speaker #3: For our call today, Bill Fallon and Joe Schachinger will provide introductory comments and then a question and answer session will follow. Now, here is Bill Fallon.
Speaker #4: Thanks, Greg. Good morning, yone. Thank you for being with us today. Our second quarter 2025 financial results had a lower net loss than the
Speaker #4: comparable period 10-Qs, which are available on for 2024. Compared to 2024, our second quarter 2025 financial results benefited from lower losses in LAE and lower investment in BIE losses at MBIA Insurance Corp.
Speaker #4: Our priority continues to be resolving national's PREPA exposure, where the timing of that resolution remains uncertain. Currently, the Title III court is addressing the administrative expense claims.
Speaker #4: Given the uncertainty associated with the possible outcomes for national's PREPA bankruptcy claim, which is in excess of $800 million, we continue to believe that the maximized shareholder value will likely require substantially reducing the uncertainty regarding PREPA.
Speaker #4: Regarding the balance of national's insured portfolio, those credits have continued to perform generally consistent with our expectations. The gross par amount outstanding for national's insured portfolio has declined by approximately 1.1 billion dollars from year-end 2024, to about 24 billion dollars at June 30th, 2025.
Speaker #4: National's leverage ratio of gross par to statutory capital is 26 to 1 at the end of the second quarter. As of June 30th, 2025, national had total claims process to sell the company in the paying resources of 1.5 billion dollars and statutory capital statutory capital and surplus in excess of $900 million.
Speaker #4: Now, Joe will provide additional comments about our financial results.
Speaker #5: Thank ou, Bill, and good morning, all. I will begin with a review of our second quarter 2025 GAAP and non-GAAP results and then provide an overview of our statutory results.
Speaker #5: The company reported a consolidated GAAP net loss of $56 million, or a negative $1.12 per share, for the second quarter of 2025, compared with a consolidated GAAP net loss of $254 million, or a negative $5.34 per share, for the second quarter of 2024.
Speaker #5: The lower GAAP net loss this quarter was mostly driven by lower losses in LAE at national, primarily on its PREPA exposure. National's loss in LAE for the second quarter of 2025 was $6 million dollars, compared with $141 million dollars for the second quarter of 2024.
Speaker #5: The larger losses in LAE for the second quarter of 2024 related to national's exit from the then-proposed PREPA plan of adjustment prompting us to revise our loss scenarios to reflect a range of negotiated and litigated outcomes.
Speaker #5: Also contributing to lower GAAP net losses this quarter but to a lesser extent were lower net losses on financial instruments relating to the revaluation of MBIA Insurance Corp's equity interests in a Zohar-related portfolio company received in connection with claims paid on the Zohar CDOs, and lower losses at MBIA Insurance Corp related to insured variable interest entities or VIEs.
Speaker #5: Higher VIE losses in the second quarter 2024 primarily related to the de-consolidation of a VIE as part of our strategy to de-risk MBIA Insurance Corp's insured portfolio.
Speaker #5: With no comparable activity in the second quarter of 2025. The company's adjusted net loss a non-GAAP measure was $8 million dollars or a negative $0.17 per share for the second quarter of 2025, compared with an adjusted net loss of $138 million dollars or a negative $2.90 per share for the second quarter 2024.
Speaker #5: The favorable change was primarily due to the lower losses in LAE at national. MBIA INC's book value per share decreased $2.15 to a negative $43.14 per share as of June 30th, 2025, from a negative $40.99 per share as of December 31st, 2024.
Speaker #5: This decrease was primarily due to our $118 million dollar consolidated net loss for the first six months of 2025 partially offset by a decrease in unrealized losses on investments recorded in accumulated other comprehensive income.
Speaker #5: Included in MBIA INC's book value as of June 30th, 2025, is MBIA Insurance Corp's negative book value of $51.49 per share. Which decreased from a negative $49.48 per share as of December 31st, 2024.
Speaker #5: 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 $677 million dollars as of June 30th, 2025.
Speaker #5: Within this total are the following material assets: unencumbered cash and liquid assets held by MBIA INC totaled $355 million dollars, which was down from $380 million dollars as of December 31st, 2024, primarily due to interest payments on the corporate segment's debt.
Speaker #5: In addition to the unencumbered cash and liquid assets, the corporate segment's assets included approximately $214 million dollars of assets at market value pledged to guaranteed investment agreement contracts holders.
Speaker #5: Which fully collateralized those contracts. Now, I'll turn to the insurance company's statutory results. National reported statutory net income of $6 million for the second quarter of 2025, compared with the statutory net loss of $131 million for the second quarter of 2024.
Speaker #5: The positive variance primarily reflects lower losses in LAE related to national's PREPA exposure. National's statutory capital as of June 30th, 2025, was $914 million dollars, up $2 million dollars compared with December 31st, 2024.
Speaker #5: The increase in statutory capital was driven by year-to-date net income of $11 million dollars, which was mostly offset by an increase in unrealized losses on investments.
Speaker #5: Claims paying resources were $1.5 billion dollars and continued to be consistent with December 31st, 2024. Now, I'll turn to MBIA Insurance Corp. MBIA Insurance Corp reported statutory net income of $4 million dollars for the second quarter 2025, compared with the statutory net loss of $35 million dollars for the second quarter of 2024.
Speaker #5: The favorable variance was primarily due to lower losses in LAE, a small losses in LAE benefit in the current quarter was primarily driven by favorable adjustments to recoveries of paid claims associated with the Zohar CDOs.
Speaker #5: While $34 million dollars of losses in LAE in the second quarter of 2024 was primarily driven by unfavorable adjustments, to our Zohar-related recoveries. As of June 30th, 2025, the statutory capital of MBIA Insurance Corp was $92 million dollars, which was $4 million dollars higher than year-end 2024.
Speaker #5: Claims paying resources totaled $346 million dollars at June 30th, 2025, compared with $356 million dollars at December 31st, 2024. MBIA Insurance Corp's insured gross par outstanding was $2.2 billion dollars as of June 30th, 2025, down from $2.3 billion dollars at year-end 2024.
Speaker #5: And now, we will turn the call over to the operator to begin the question and answer session.
Speaker #1: Thank you. 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.
Speaker #1: We ask that when posing your question, you please pick up your handset to allow optimal sound quality. We'll take our first question from Tommy Joint with KBW.
Speaker #1: Please go head.
Speaker #6: Hey. Good morning, guys. Thanks , for taking our questions. the, the, the first one, I, I see in the, the, the, the 10-Q, a, a disclosure about national transferring, certain PREPA bankruptcy claims to a custodian.
Speaker #6: so a, a few questions around that. you know, first, can we interpret this action, as a signal that you guys are, are marketing, selling those claims to, to potential buyers, a-and secondly, is there a, you know, potential liquid buyer pool, for those claims?
Speaker #6: And then, a secondly, it looks like you only transferred certain claims, of the PREPA side. I guess, w-what made you decide between which ones to transfer and which ones not to transfer?
Speaker #6: Thanks.
Speaker #7: Yeah. Tommy, what took place is $374 million dollars of claims were transferred to custodian and returned they transferred to us. What I refer to as custodial receipts.
Speaker #7: we are we feel very good about the litigation. With regard to PREPA, as you know, it's been ongoing, and is the focus and a priority for us.
Speaker #7: What happens as we have different bonds where we pay the full debt service? Those then become claims versus unpaid bonds. So it's not a question that we pick and choose.
Speaker #7: Right? Those have been completely paid off bonds. And essentially, by doing this, they are more marketable in that they become effectively securities versus, you know, claims.
Speaker #7: So that's what ou saw reported. That's in our 10-Q. with regard to how many buyers there are for this, we believe there are some, as you ow, in the past.
Speaker #7: We sold actually about a third of our PREPA claims going back a few years ago. So there are other interested parties. Whether or not we sell them remains to be seen.
Speaker #7: but we thought that by doing this, it does make them more marketable. There are certain investment funds that are more likely to be able to hold them because they are now securities.
Speaker #7: They have their own QCIP number. and things like that.
Speaker #6: Okay. Got it. Thanks for, for clarifying that. a-and then secondly, looking to some of the recent headlines, the, the oversight board in Puerto Rico, saw five of its, seven members you know, get terminated by, by the president.
Speaker #6: a-as we think about just, like, logistically, you know, how this impacts the, the restructuring and the negotiations between bondholders, and the oversight board, and, and other stakeholders, h-how do you guys view that, that headline, is it a positive?
Speaker #6: It does it delay the process? Just what, what are your viewpoints around that?
Speaker #7: There are lots of questions that all the interested parties have given the news that ou just referenced. That is the, the dismissal of five of the board members.
Speaker #7: hard to tell exactly what happens. I think in the coming days, we'll know a whole lot more starting with how long does it take to replace those board members?
Speaker #7: Who are the new board members? What approach should they take? given the challenges that we've had with PREPA and the ire we believe of all the creditors to reach a, consensual deal, we would hope that this will turn out to be a positive.
Speaker #7: Again, until those questions that I just mentioned are answered and the approach that the newly reconstituted board takes, it would really be just speculation on our part in terms of, of what happens.
Speaker #7: But as you know, when you go back through the history of PROMESA, which is now, geez, you know, we're nine years into it, there were four large credits that we had that were put in the Title III. Three of those have been resolved in a consensual way.
Speaker #7: It looked as though there was low probability right now that we would reach a, consensual deal in during the deal in the near term.
Speaker #7: but perhaps this you ow, news will lead to an increased probability for a settlement, even along a faster timeline. But we just don't know at this point.
Speaker #7: Okay.
Speaker #6: Got it. and then this last one, looking also at that, the disclosures in the in the queue, there's a note that the oversight board, informed the court that it intending to modify national's settlement in the forthcoming amended plan.
Speaker #6: Could you give me some background and some details on what that's referring to?
Speaker #7: Tommy, which, which disclosure are you referring to?
Speaker #6: in the queue, the, the business developments around PREPA, it reads that following the appeal decision, the oversight board informed the court national and other parties that it intended to modify national's settlement in a forthcoming amended plan.
Speaker #7: Yeah. I think you're referring to the one that, that, that's it's in the current queue, but it's a dated it took place a while back.
Speaker #7: so I, I 't think there's any new information that we're sharing on that one. That, that's with regard to, the agreement that we had, which they wanted to modify.
Speaker #7: Which is then resulted in us, we think they breached the agreement. We, right, the, the agreement effectively came terminated.
Speaker #6: Okay. Thanks.
Speaker #1: Thank you. And we'll go next to the line of Carlos Fardo, Private Investor. Please go head.
Speaker #8: Oh, hi. This is Carlos calling from, from London. Hi. Thank you very again for your time, back in February, you know, and, thank you again for the, h, thank you also for the move to, to sell the claims or to pass the claims to the to the custodian.
Speaker #8: I think , I agree that it is, it, h, it increases the marketability. So, I mean, thank ou. Thank you for that. I think it is in line with what, what I suggested in, in February.
Speaker #8: And, I, I really reciate the, the move. In terms of the repurchase, capacity, we still have the 71 million. repurchase has, capacity. And, my suggestion, and this is only a suggestion, is that if the share prices boot at any point, hopefully not, fall again to, to lower levels, to, to ones that we have now, that you would consider, and I say only consider, using this, repurchase capacity as, as, this at the moment we could buy we could repurchase approximately 20% of the shares outstanding.
Speaker #8: So if, we were back to lower levels, you know, please, just, just consider, consider the possibility of using it. I know that this was a plan A.
Speaker #8: Mm-hmm.
Speaker #7: Yeah. No. thank you. we agree with you. We look at potential repurchases of stock, constantly. And, you are correct. We have authorization remaining. And it is something that, we are always looking at and, and trading that off with liquidity, issues at the holding company, and capacity at national through repurchase.
Speaker #7: Based on, statutory requirements. So, we agree with you.
Speaker #6: Okay.
Speaker #7: With something that we will continue to look at.
Speaker #8: Perfect. Thank you very much. If, at any point I feel that, you know, that, that we have reached hopefully not, you ow, a, a le a lower a level that is lower enough to, to justify the repurchase, I will, I will, of course, drop you a line.
Speaker #8: But at the moment, I don't think that it is necessary. But just, the idea of, h, of the repurchases being, a possibility, you know, helps us, shareholders a lot.
Speaker #8: Then the next question would be on the, on the cooperation agreement with, with Azure and GoldenTree. Is it a is it still the case that, that, it is it will expire in December on the at the end of the year?
Speaker #8: But that a GoldenTree and, Azure Guarantee expend it until the end of March?
Speaker #7: Yeah.
Speaker #6: Okay. I'm sorry.
Speaker #7: Perfect.
Speaker #6: Okay.
Speaker #7: Go ahead, Joe's gonna Joe's gonna take.
Speaker #9: Carlos, I'm sorry. Could you repeat the estion?
Speaker #6: It's just about the cooperation.
Speaker #9: Yeah. the, the cooperation agreement with, h, or the ad hoc, group with, Azure Guarantee and GoldenTree. At the moment, our agreement, will expire at the end of the year.
Speaker #9: But the GoldenTree and Azure, can expend it until the end of March. Is, is that still the case? Is my is my understanding correct?
Speaker #7: Yes. So with regard . The agreement,
Speaker #9: The termination.
Speaker #7: os, yeah. We, we look that, the group looks at that. given the news that the previous caller asked about.
Speaker #9: Mm-hmm.
Speaker #7: With the reconstitution of the board.
Speaker #9: Mm-hmm.
Speaker #7: We will be gathering new information very shortly. We hope. That.
Speaker #9: Mm-hmm.
Speaker #7: ads to, you know, real discussions and potentially a deal. but we'll continue to review. That
Speaker #9: Mm-hmm.
Speaker #7: ation and how it relates to the co-op agreement. but we feel that the co-op agreement has been beneficial up until this point. but we'll continue.
Speaker #9: Mm-hmm.
Speaker #7: To
Speaker #7: ok at .
Speaker #8: Perfect. My suggestion, and again, it is only a suggestion, is that you don't expend the co-op until we have the November call.
Speaker #8: So that would be and, and in, you know, if that's a suggestion, a polite suggestion. So just, you know, of course, you are you, you guys are in charge.
Speaker #8: But that's, that would be my suggestion.
Speaker #7: Okay. Thank ou.
Speaker #8: Thank you. And then another the, the final question is, regarding the PREPA posure. at the moment, the outstanding exposure would be the total exposure would be, in, in the as, as per the results would be $657 million.
Speaker #8: But I assume that, h, we have made a significant payment back in, on, on the 1st of July. is it possible to give an updated figure?
Speaker #7: yeah. Carlos, we do report that in our operating supplement. As of June 30th, the outstanding part was $540 million.
Speaker #9: Mm-hmm.
Speaker #7: and we didn't make and we didn't make a, 91 million or 97 million dollar payment in on July 1st.
Speaker #8: Okay. Perfect. That's fantastic. Thank you. So that's all. And thank you very much again for the move with the custodian.
Speaker #8: Really, really appreciate .
Speaker #7: Thank ou.
Speaker #8: Thank you.
Speaker #1: Thank you. Thank you. And we'll go next to the line of John Staley with Staley Capital Advisor. Please, please go head.
Speaker #10: Yes. thank ou. Bill, when the, company administration removed five of the seven members of the oversight committee, I think, of course, I think they're all political appointees.
Speaker #10: But did it include the chairman?
Speaker #7: yes. The current chair of the oversight board was Arthur Gonzalez. He was one of the five people who was dismissed. by the president.
Speaker #10: And he has has am I correct that he has historically, has he the professor that has been, shall I say, challenging to deal with?
Speaker #10: With his leadership?
Speaker #7: No. No. That you're referring to David Skeel. He stepped down a while back. Arthur Gonzalez is
Speaker #10: Okay.
Speaker #7: a retired bankruptcy judge.
Speaker #10: Oh, okay. All right. So who were the two that were left and why were they left?
Speaker #7: John, there, there were no reasons given. for that. we just know that the five were dismissed. The two that were left are Andrew Biggs and, and John Nixon.
Speaker #10: And, do you find that a positive or a negative, that there's a there's a two that stayed?
Speaker #7: listen, it-it's hard for us to assess. We don't deal with, sort of each of the seven board members. We deal. Typically
Speaker #9: Mm-hmm.
Speaker #7: Their advisors. There's some contact occasionally with board members. But, as you can imagine, given all the parties involved, most of this is done through lawyers, etc., and advisors.
Speaker #7: So, hard to know at the individual, board member level, exactly how they view different aspects of the restructuring.
Speaker #10: But in order to get this restructuring completed, I gather that while they were they removed five of the seven, the oversight board's authority remains in place.
Speaker #10: So that they'll have to put on an additional five or four or three, whatever, whatever the bylaws require. For this com this oversight board to continue to function, and continue to exercise i-its, so-called, oversight power to approve any deal that's done.
Speaker #7: I. Under certain.
Speaker #10: I mean, they didn't get.
Speaker #10: Support. The board's still there.
Speaker #7: You're, you're, you're, you're, you're correct, John. There are certain things that can continue. But there would certain things, for example, actually approving and confirming a plan, the board would need to have a quorum two people does not or two directors does constitute a quorum, under Promesa.
Speaker #7: They need to have four. They ed a certain number of positive votes. so they will need to add board members, which our understanding is that that is the intention just a question , of when that happens and who the people are.
Speaker #10: Okay. All right. And are there, any valuation guidelines on the, for instance, when you when you transferred the fully paid bonds? Has there been any transactions in those bonds that suggest what market levels are out there?
Speaker #7: Yeah. It's not a very, deep or liquid market. There are some trades that have been done. again, it's very small. So nothing along the size along the lines of the size that we transferred into the custodian into the custodian.
Speaker #7: 'Cause I mentioned that's $374 million. The small trades that have been done have been done at about 55 cents on the dollar.
Speaker #10: For the uninsured. Mm-hmm.
Speaker #7: Yes. Those are for uninsured bonds. That's Greg reminds me. But
Speaker #10: Yeah.
Speaker #7: that's, that's roughly. But again, those are small, small transactions.
Speaker #10: Okay. All right. Thank you very much.
Speaker #1: Thank you. As a reminder, you would like to ask a question, it is the star and one on your touchtone telephone. And we'll take our next question from Patrick Stadelhoffer with Khan Brothers.
Speaker #1: Please go head.
Speaker #11: good ning. now that you've turned your.
Speaker #10: Good morning.
Speaker #11: Good morning. now that you've ed your claims into easy-to-sell securities, would monetizing half your exposure, like you four or five years ago, move along a sale process by lowering that uncertainty you talk ?
Speaker #11: and kind of narrow that the bid-ask spread? Or would it at least help with a special dividend in the alternative?
Speaker #7: it clearly will reduce the uncertainty with regard to PREPA, which, you know, is one of the things that we've cited. needs to happen for us to pursue a, a sale of the company.
Speaker #7: So you know, if we were to sell $374 million of our total exposure, which is a little bit in excess of 800 million, that clearly would, be a big step in that direction.
Speaker #7: with regard to the second, a little bit premature to start speculating what happens with ard to the special dividends just given the remaining Puerto Rico exposure.
Speaker #7: But, again, all those things are possibilities. And the probability goes up, as we take those types of actions that you're gesting.
Speaker #11: And just a question is, why did you, take the step to transfer to the custodian now? As opposed some of these other tranches had already matured a few years ago?
Speaker #11: so just I guess a question about the timing. Thank you.
Speaker #7: Yeah. I think nothing special about the timing. We've been looking at this, it takes a while to put the, program in place. We thought we'd gotten to, quantum of bond claims where it was meaningful.
Speaker #7: And that by increasing the marketability of those, it might help facilitate sales. If we found attractive prices to transact that. but as we've said, we've also sold them, without putting them into, a custodian, and creating, a custodial receipts, where we have sold claims.
Speaker #7: But again, we thought it was a good thing to do. Nothing in particular about this time. There was no specific catalyst to doing it right now.
Speaker #6: Great. Thank you.
Speaker #1: Thank you. And we'll take our next question from Paul Saunders with Hutch Capital.
Speaker #12: Morning, Bill. Thanks for taking my question.
Speaker #6: Sure. Morning.
Speaker #12: on those on the, the s the transferred claims that we're talking about to the custodian, you mentioned $374 million. is that all of the claims?
Speaker #12: Or my understanding was you had about $300 million previously. And now you just paid $92 million. So you know, rough numbers, $394 hundred. Did you leave any behind?
Speaker #12: And, a-and if so, was there a reason for that?
Speaker #7: No. We didn't ave any behind. As I mentioned, y-you can't, transfer it until you've paid off the full bond. Right? So when you, you go back, we talk about our PREPA exposure.
Speaker #7: But it's made up of lots of different bonds that we insured. So even though you saw $91 million getting paid, you know, it's possible that none of those were the last payment on a particular bond.
Speaker #7: So, it’s just a question of when you've made the last debt service payment, and the bond's completely paid off. That we can then transfer it and create a new QCIP for it.
Speaker #6: Perfect. That makes perfect sense. and then last one, this is also pretty tiny. But, it did look like national's, salvage went a went down a little bit, lost reserves went up, you know, slightly.
Speaker #6: I'm assuming that's changing the recovery. Assumptions on PREPA and, and if so, I mean, I guess is that right? And, and if so, was there a reason that you thought sort of PREPA recoveries might be a little bit lower than as of last quarter?
Speaker #7: yeah. So, the, the change you're seeing is a result of, modifications to assumptions. Within our, PREPA scenarios, w yeah, each quarter, we look at those assumptions.
Speaker #7: And we make, we may make modifications. This quarter, we did make a small modification. and which generated a, a small, loss, which you're eing reflected in the results.
Speaker #6: Okay. Can, can you, you ow, I, I obviously, it unds like you don't really want to provide any more color on that. Was, was there something that happened that, that, that made you change that?
Speaker #6: And, and I kind of while we're on that, is, is that something like where you know, the market obviously views the, the, the board decision by Trump as positive.
Speaker #6: you know, is that something you'd factor into your recovery assumptions that, you know, now maybe, maybe m-market prices of PREPA claims are moving higher or something?
Speaker #6: W-would you factor that into the recovery assumptions for the, the quarterly balance sheet?
Speaker #7: Yeah. So Paul, with regard to sort of our earlier comment, in terms of the current reserve that was reflected in the second quarter results, just following up on Joe's comments, it, it really had to do more with timing as opposed to the dollar or percentage recovery.
Speaker #7: And.
Speaker #6: Yeah.
Speaker #7: As you know, right, we follow the, the litigation, the, the process every quarter we look at it. we try to estimate how much longer it's going to take.
Speaker #7: And, and no one has a precise answer. but I think the, the client himself, as you saw, had to do with it taking longer than perhaps we expected three months earlier.
Speaker #7: Nothing more than that. There was no new information with regard to, what the oversight board was gonna offer, what the bondholders might accept, where there might be an agreement reached.
Speaker #7: with regard to your follow-up question, regarding the events this week and what will be a newly constituted board, in the, the near future, we will take that into account when we do reserves for third quarter based on what we learn.
Speaker #7: So when the board is in place, the, the board and its advisors have a new approach, with regard to, you ow, perhaps increasing the likelihood that a, consensual deal is reached, versus litigating this and, you know, people put forth estimates how long it could take to litigate.
Speaker #7: So in that sense, absolutely, it will get factored in to the reserves if we think that has changed. Any assumptions in the scenarios that we used.
Speaker #6: That's great. and sorry, one more for me, Bill, while I have you. 'cause you're, ou're being so open with us on these. And it's very pful for me.
Speaker #6: But the articles on the board news are, you know, as I said, very positive. There's a view that Trump is bondholder-friendly.
Speaker #6: Can you being a little closer to situation than me to, do you agree with that? And, ou know, do you have any sort of context or have you heard him discuss Puerto Rico specifically or anything like that in s of how his views might be different than the current oversight board?
Speaker #6: Or, or have you sort of heard any expectations on, on, I ess, Trump's view of how he would, would resolve the difference between the island and the oversight board and the bondholders?
Speaker #7: So with regard to the last part of your question, none of us here have heard anything from the president with regard to Puerto ico.
Speaker #7: Right? Whether it be any, public statements, we're unaware of any, or anything that we've heard through, you know, advisors or any of his, cabinet or thing like .
Speaker #7: with regard to, sort of the early part of the question and, and what does this mean? And how will the approach and the news seems to have been a positive, as you mentioned, we obviously see all the same things.
Speaker #7: given that we've been at this for quite a long time, it would be great if, in fact, sort of the market reaction is correct and this moves along faster than perhaps people anticipated, even you know, a week ago.
Speaker #7: whether it's gonna be more friendly, the bondholders, all those things, hopefully we'll learn more in the very near future. So you know, we like to be optimistic.
Speaker #7: but again, what we know in terms of facts are that five board members have been dismissed. and that's all we know at this point.
Speaker #6: Sounds good. Thank you, Bill.
Speaker #7: Thank ou.
Speaker #1: At this time, I am showing no further estions. So I'd like to turn the floor back over to Greg. Diamond, please go head.
Speaker #6: Thank you, Erica. And thanks to those listening our call today. Please contact us directly if you have additional questions. We also recommend that you visit our website at mbia.com for additional information on our company.
Speaker #6: Thank you for your interest in MBIA. Good day and goodbye.