MBIA's Q4 2024: Unpacking Contradictions in PREPA Litigation, NatRe Growth, and Strategic Buybacks

These are the key contradictions discussed in MBIA's latest 2024Q4 earnings call, specifically including: PREPA Litigation Strategy, NatRe's Integration and Growth Trends, and MBIA's Approach to Potential Sales or Stock Buybacks:



Financial Performance and Improved Results:
- MBIA reported a consolidated GAAP net loss of $447 million for full year 2024, compared to $491 million in 2023, indicating a significant improvement.
- The lower net loss was driven by reduced investment losses in the National and Corporate segments, lower operating expenses, and favorable variances in net realized investment losses.

National's PREPA Exposure and Uncertainty:
- MBIA's National segment has an uncertain $800 million exposure due to Puerto Rico's Power Authority (PREPA) bankruptcy.
- The uncertainty around PREPA's resolution poses challenges for the company, impacting strategic decisions such as pursuing a potential sale.

Capital Management and Dividend Strategy:
- MBIA declared a regular as-of-right dividend of $69 million to MBIA Inc. in Q4 2024, contributing to capital management efforts.
- The company explores the possibility of more frequent, smaller special dividends in collaboration with its regulator, subject to progress in resolving the PREPA situation.

Insurance Portfolio and Risk Management:
- The gross par amount outstanding for National's insured portfolio decreased by $3.1 billion to approximately $25 billion by the end of 2024.
- The decrease in gross par outstanding is driven by regular amortization and proactive derisking efforts, indicating effective risk management strategies.