MBIA (US:MBI)2023-08-06 13:19Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $74 million or a negative $1.46 per share for Q2 2023, compared to a net loss of $36 million or negative $0.72 per share for Q2 2022, indicating a significant increase in losses [8][11] - The adjusted net loss, a non-GAAP measure, was $22 million or a negative $0.45 per diluted share for Q2 2023, compared to an adjusted net loss of $47 million or a negative $0.93 per diluted share for Q2 2022, showing improvement [9][10] - Book value per share decreased to a negative $19.21 as of June 30, 2023, from a negative $16.07 as of December 31, 2022, primarily due to net losses and share repurchases [11] Business Line Data and Key Metrics Changes - National reported a statutory net loss of $11 million for Q2 2023, an improvement from a statutory net loss of $44 million for Q2 2022, attributed to lower loss in LAE and higher investment income [12][13] - The gross par outstanding for MBIA Corp. reduced by approximately $130 million during the quarter, totaling $3.2 billion as of June 30, 2023 [14] Market Data and Key Metrics Changes - National's outstanding gross par declined by approximately $1.2 billion from year-end 2022 to $30.5 billion as of June 30, 2023, indicating a continued run-off of its insured portfolio [6] Company Strategy and Development Direction - The company is focused on resolving its last material exposure to the Commonwealth of Puerto Rico, specifically the Puerto Rico Electric Power Authority (PREPA), while also reducing expenses and repurchasing shares [5][6] - A $100 million share repurchase authorization was approved, with 3 million shares repurchased at an average price of $8.08 per share, reducing the outstanding share count to 51.9 million [5] Management's Comments on Operating Environment and Future Outlook - Management expressed hope for a timely resolution regarding PREPA, with ongoing efforts to monitor the run-off of insurance portfolios and deliver shareholder value [5][6] - The company remains cautious about the operating environment, emphasizing the importance of maintaining liquidity and managing capital effectively [30] Other Important Information - National's leverage ratio of gross par to statutory capital remained unchanged at 16:1 as of June 30, 2023, with total claims paying resources of $2.4 billion and statutory capital in surplus of $1.9 billion [7] Q&A Session Summary Question: What is National's statutory capacity for buybacks as of June 30? - National had about $50 million of capacity left to purchase shares [15] Question: What happens to the shares that National has repurchased if it is sold? - Most likely, those shares would be retired and sent to the holding company [18] Question: Was National's provision attributed to PREPA driven by time value of money or lower expected recoveries? - It was a combination of both factors, including delays and potential risks [20] Question: Can you provide an update on the state of play for National regarding PREPA? - The current deadline for filing a plan is tomorrow, with ongoing focus on the existing PSA [22] Question: How do you view the better use of capital in terms of stock versus bonds? - The company is focused on near-term liquidity and obligations, prioritizing bond repurchases that align with their liquidity profile [34]