MBIA's Q1 2025 Earnings Call: Navigating Contradictions in PREPA, Capital Strategies, and Ratings Impact

PREPA resolution and political involvement, capital deployment strategies, impact of AM Best rating are the key contradictions discussed in MBIA's latest 2025Q1 earnings call.



Improved Financial Results:
- MBIA Inc. reported a consolidated GAAP net loss of $62 million or negative $1.28 per share for the first quarter of 2025, compared to $86 million or negative $1.84 per share in the first quarter of 2024.
- This improvement was driven by favorable changes in revenues from consolidated VIEs, lower losses in LAE, and reduced operating expenses, particularly compensation-related expenses.

National's PREPA Exposure Uncertainty:
- MBIA continues to prioritize resolving National's PREPA exposure, with an uncertain path and timing, affecting National's insured portfolio.
- The Title III Court lifting stays on selected litigation matters related to PREPA may facilitate its resolution, but the outcome remains uncertain.

National's Insured Portfolio Performance:
- National's insured portfolio gross par amount outstanding has declined by approximately $500 million to about $25 billion as of March 31, 2025.
- The balance of National's insured portfolio continues to perform generally consistent with expectations, with credits performing well except for PREPA.

Statutory Results and Capital Position:
- National reported statutory net income of $4 million for the first quarter of 2025, compared to a statutory net loss of $11 million in the first quarter of 2024.
- National's leverage ratio of gross par to statutory capital was 27:1 at the end of the first quarter, with total claims paying resources of $1.5 billion and statutory capital and surplus in excess of $900 million.