MBIA (US:MBI)2024-11-08 17:58Financial Data and Key Metrics Changes - For Q3 2024, the company reported a consolidated GAAP net loss of $56 million, or a negative $1.18 per share, compared to a net loss of $185 million, or a negative $3.94 per share in Q3 2023, indicating a significant improvement in financial performance [14] - The adjusted net loss for Q3 2024 was $174,000, or essentially $0.00 per share, compared to an adjusted net loss of $138 million, or negative $2.92 per share in Q3 2023, reflecting a favorable change primarily due to lower loss in loss adjustment expenses (LAE) [16] - The book value per share decreased by $6.63 to a negative $39.19 as of September 30, 2024, compared to a negative $32.56 per share at year-end 2023, primarily due to a consolidated net loss of $396 million for the year-to-date period [17] Business Line Data and Key Metrics Changes - National reported statutory net income of $19 million for Q3 2024, compared to a statutory net loss of $133 million in Q3 2023, driven by lower loss in LAE related to PREPA exposure [21] - MBIA Insurance Corp. reported statutory net income of $2 million for Q3 2024, compared to a statutory net loss of $14 million in Q3 2023, with a small loss in LAE benefiting the current quarter [23] - National's gross par outstanding decreased by approximately $2.5 billion from year-end 2023 to about $26 billion at the end of Q3 2024, largely due to regular amortization of the insured portfolio [22] Market Data and Key Metrics Changes - National's leverage ratio of gross par to statutory capital was 26:1 at the end of Q3 2024, with total claims paying resources of $1.6 billion and statutory capital of $1 billion [13] - Claims paying resources for MBIA Insurance Corp. totaled $358 million as of September 30, 2024, down from $504 million at year-end 2023 [25] Company Strategy and Development Direction - The company is awaiting reduced uncertainty regarding the PREPA bankruptcy claim, which exceeds $800 million, before considering the sale of the company [11] - Management indicated that they are focused on ensuring further progress on Puerto Rico before engaging in discussions about capital release [27] Management's Comments on Operating Environment and Future Outlook - Management expressed that the feedback received suggests that engaging in the sale process would not be beneficial for shareholders at this time, but they remain open to possibilities as conditions change [31] - The recent election of a new governor in Puerto Rico may serve as a catalyst for resolving ongoing issues, which management views positively for shareholder interests [38] Other Important Information - The mediation regarding PREPA has been extended through January 31 of the following year, with ongoing uncertainty about the outcomes [10] - The corporate segment had total assets of approximately $646 million as of September 30, 2024, with unencumbered cash and liquid assets totaling $326 million [18][19] Q&A Session Summary Question: How much of the $1 billion capital at National is considered excess? - Management indicated that they do not focus on ratings and do not calculate excess capital in the traditional sense, but they are looking to ensure progress on Puerto Rico before discussing capital release [27] Question: Can you clarify the recovery rate on the PREPA claim? - Management acknowledged the logical approach taken by the analyst regarding the recovery rate but did not provide specific numbers [28] Question: Why is the company not reengaging in the sale process? - Management stated that feedback suggests it would not be beneficial for shareholders at this time, but they are open to considering it as conditions evolve [31] Question: Is the new governor likely to get more involved in PREPA restructuring? - Management suggested that while operational issues can be addressed without restructuring, resolving the bankruptcy would facilitate operational aspects [53] Question: Can the company walk away from the COAP agreement if better terms are offered? - Management confirmed that while they are currently committed to the COAP, there could be scenarios where they might change their approach [44]