Wednesday, July 18, 2018

MBIA’s Puerto Rico losses continue

By on May 10, 2018

SAN JUAN – MBIA Inc., a holding company whose subsidiaries provide financial guarantee insurance, said Thursday that its first-quarter 2018 financial results were hurt by increased losses and loss adjustment expenses from some of its National Public Guarantee Financial Corp.’s Puerto Rico exposure.

It reported a consolidated net loss of $98 million for the first quarter of 2018 compared with a consolidated net loss of $72 million for the first quarter of 2017, and an Adjusted Net Loss (a non-generally accepted accounting principles [GAAP] measure) of $61 million for the first quarter of 2018 compared with Adjusted Net Income of $9 million for the first quarter of last year.

“Puerto Rico continues to prominently influence our day-to-day activities and our financial results. Additional losses and loss adjustment expenses related to Puerto Rico credits insured by National were the largest contributor to our Adjusted Net Loss and reduction to Adjusted Book Value for the quarter. We continue to prepare for the eventual resolution of our insured Puerto Rico credits with intentions to minimize our net losses and pursue maximum recoveries of our paid insurance claims,” Bill Fallon, MBIA’s CEO, said in the announcing release

As of March 31, MBIA’s “liquidity position totaled $419 million, unchanged from Dec. 31, 2017, consisting primarily of cash and cash equivalents and other highly liquid invested assets.

National’s portfolio, the insurer said, “declined by $5 billion during the quarter, ending the quarter with $67 billion of gross par outstanding.”

The report adds that the “statutory capital of MBIA Insurance Corporation as of March 31, 2018 was $455 million and claims-paying resources totaled $1.5 billion. As of March 31, 2018, MBIA Insurance Corporation’s liquidity position (excluding resources from its subsidiary and branch) totaled $130 million consisting primarily of cash and cash equivalents and liquid short-term invested assets.”

The company hosted a webcast and conference call for investors Thursday to discuss its first quarter financial results and other matters. A recorded replay of the call will be available on the company’s website.

See MBIA’s release here.

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