MBIA (MBI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $51 million or a negative$1.07 per share for Q4 2024, compared to a net loss of $138 million or a negative$2.94 per share for Q4 2023, indicating a significant improvement in financial performance [11] - For the full year 2024, the consolidated GAAP net loss was $447 million or a negative$9.43 per share, compared to a net loss of $491 million or a negative$10.18 per share for 2023, reflecting a reduction in losses [15] - The adjusted net loss for full year 2024 was $184 million or a negative$3.90 per share, compared to an adjusted net loss of $169 million or a negative$3.49 per share for 2023, showing a slight deterioration in adjusted performance [16] Business Line Data and Key Metrics Changes - National's insured portfolio gross par amount declined by approximately $3.1 billion from year-end 2023 to about$25 billion at the end of 2024, indicating a reduction in exposure [9] - The Corporate segment had total assets of approximately $707 million as of December 31, 2024, with unencumbered cash and liquid assets totaling$380 million, down from $411 million at year-end 2023 [18] Market Data and Key Metrics Changes - National reported total claims paying resources of$1.5 billion, down $174 million from December 31, 2023, reflecting a decrease in financial strength [21] - MBIA Insurance Corp.'s insured gross par outstanding was$2.3 billion as of December 31, 2024, down about 18% from year-end 2023, driven by regular amortization and proactive derisking [24] Company Strategy and Development Direction - The company continues to prioritize resolving National's PREPA exposure, which is critical for maximizing shareholder value [7] - Management indicated that while they are open to more frequent, smaller special capital releases, they prefer to wait for more certainty regarding PREPA before pursuing such actions [30] Management Comments on Operating Environment and Future Outlook - Management expressed that the path and timing for resolving PREPA's outstanding debt remain uncertain, with ongoing developments but significant challenges ahead [8] - The management highlighted the importance of both recovery amount and timing in their strategy regarding PREPA, indicating alignment with other bondholders on these objectives [32] Other Important Information - The company's book value per share decreased by 8.43% to a negative $40.99 per share as of December 31, 2024, primarily due to the consolidated net loss for the year [16][17] - National's statutory capital as of December 31, 2024, was$912 million, down $205 million compared to the previous year, largely due to its statutory net loss [21] Q&A Session Summary Question: Can you discuss the strategy for releasing capital beyond the regular dividend? - Management confirmed that it is possible to work with the regulator for more frequent special capital releases, but they prefer to wait for more certainty around PREPA before proceeding [28][30] Question: What is MBIA's position within the creditor group regarding PREPA? - Management stated that both recovery amount and timing are important, and they are aligned with other bondholders on these objectives, emphasizing the need for resolution [32][34] Question: Is there a possibility to exclude PREPA obligations in a sale process? - Management indicated that while it is possible to carve out PREPA obligations, previous offers have been deemed inadequate for shareholders [43][45]