MBIA (US:MBI)2021-05-11 14:52Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $106 million or a negative $2.16 per share for Q1 2021, an improvement from a net loss of $333 million or a negative $4.62 per share in Q1 2020 [9] - The adjusted net loss for Q1 2021 was $116 million or a negative $2.36 per diluted share, compared to an adjusted net loss of $47 million or negative $0.65 per diluted share in Q1 2020 [11] - Book value per share decreased to a negative $0.76 as of March 31, 2021, down from $2.55 as of December 31, 2020 [11] Business Line Data and Key Metrics Changes - National's insured portfolio gross par outstanding declined to $40.5 billion at March 31, 2021, down $1.4 billion from year-end 2020 [8] - National reported a statutory net loss of $35 million for Q1 2021, an improvement from a statutory net loss of $80 million in Q1 2020 [13] - MBIA Insurance Corp. had a statutory net loss of $34 million for Q1 2021, compared to a statutory net loss of $91 million in Q1 2020 [15] Market Data and Key Metrics Changes - The leverage ratio of National's gross par to statutory capital was 21:1 as of March 31, 2021 [8] - National's total fixed income investment portfolio had a book-adjusted carrying value of $2 billion as of March 31, 2021 [14] Company Strategy and Development Direction - The company has reached an agreement with the Oversight Board to resolve its Puerto Rico Highways and Transportation Authority exposure, indicating a focus on Puerto Rico credits as a top priority [6][24] - Management is considering strategic alternatives, including potential consolidation in the industry, and is likely to be a seller in the future [24] Management Comments on Operating Environment and Future Outlook - Management expressed hope that the process for implementing the restructuring support agreement for PREPA will regain momentum soon [7] - The company anticipates that the restructuring of Puerto Rico credits could be resolved by early to late 2022, although no specific dates are set [7][24] Other Important Information - The Corporate segment had total assets of approximately $900 million as of March 31, 2021, with unencumbered cash and liquid assets totaling $298 million [12] - Cash and liquid assets for MBIA Insurance Corp. increased to $503 million as of March 31, 2021, up from $130 million as of December 31, 2020 [15] Q&A Session Summary Question: What is the timeline for PREPA negotiations? - Management indicated there is no specific date set for PREPA negotiations but expects attention to turn towards it now that other agreements have been made [19] Question: Can you discuss the Board's thinking on potential buybacks at National? - National currently does not have the capacity to buy back shares due to regulatory constraints, but future capacity may open up depending on surplus increases or stock price decreases [22] Question: What actions are being considered to create value for shareholders in the interim? - The company is focused on executing Puerto Rico deals and expects the portfolio to continue to decline, which is seen as beneficial [24] Question: Are the settlement agreements consistent with Assured Guaranty? - Management confirmed that the agreements on HTA are consistent with those of Assured Guaranty [26]