Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $56 million or a negative $1.12 per share for Q2 2025, compared to a consolidated GAAP net loss of $254 million or a negative $5.34 per share for Q2 2024, indicating a significant improvement in financial performance [9][10] - The adjusted net loss for Q2 2025 was $8 million or a negative $0.17 per share, compared to an adjusted net loss of $138 million or a negative $2.90 per share for Q2 2024, reflecting lower losses in LAE [11] - Book value per share decreased by $2.15 to a negative $43.14 as of June 30, 2025, from a negative $40.99 as of December 31, 2024, primarily due to the consolidated net loss [12] Business Line Data and Key Metrics Changes - National reported statutory net income of $6 million for 2025, compared to a statutory net loss of $131 million for 2024, driven by lower losses in LAE related to PREPA exposure [14] - MBIA Insurance Corp reported statutory net income of $4 million for 2025, compared to a statutory net loss of $35 million for 2024, also due to lower losses in LAE [15] Market Data and Key Metrics Changes - The gross par amount outstanding for National's insured portfolio declined by approximately $1.1 billion from year-end 2024 to about $24 billion as of June 30, 2025 [7] - National's leverage ratio of gross par to statutory capital was 26 to 1 at the end of Q2 2025, with total claims paying resources of $1.5 billion [8] Company Strategy and Development Direction - The company continues to prioritize resolving National's PREPA exposure, with the timing of resolution remaining uncertain, and believes that reducing uncertainty regarding PREPA is essential for maximizing shareholder value [7] - The transfer of $374 million of claims to a custodian is seen as a move to enhance marketability and facilitate potential sales of those claims [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that the recent changes in the Puerto Rico oversight board could lead to a more favorable environment for reaching a consensual deal regarding PREPA [25][26] - The company is cautious about speculating on the impact of the oversight board changes until more information is available regarding new board members and their approach [25][26] Other Important Information - The corporate segment had total assets of approximately $677 million as of June 30, 2025, with unencumbered cash and liquid assets totaling $355 million [13] - The company has ongoing discussions regarding a cooperation agreement with Azure and GoldenTree, which is set to expire at the end of the year [42] Q&A Session Summary Question: Can the transfer of PREPA bankruptcy claims to a custodian be interpreted as a signal that the company is marketing those claims? - Management confirmed that $374 million of claims were transferred to a custodian to enhance marketability, making them effectively securities [20][22] Question: How does the recent dismissal of oversight board members impact restructuring negotiations? - Management stated that it is difficult to assess the impact until new board members are appointed and their approach is known, but there is hope for a positive outcome [25][26] Question: Is the cooperation agreement with Azure and GoldenTree still set to expire at the end of the year? - Management confirmed that the agreement will expire at the end of the year, but discussions are ongoing regarding its implications [42] Question: What is the current outstanding exposure related to PREPA? - As of June 30, the outstanding exposure was reported at $504 million, with a payment of approximately $91 million made on July 1 [45] Question: How does the company view the recent changes in the oversight board regarding bondholder interests? - Management noted that while they have not heard specific statements from the president regarding Puerto Rico, the changes are viewed positively and may facilitate a faster resolution [78]