MBIA INC

Previous wording

MBIA Inc., together with its consolidated subsidiaries, (collectively, “MBIA”, the “Company”, “we”, “us”, or “our”) operates within the financial guarantee insurance industry. MBIA manages its business within three operating segments: 1) United States (“U.S.”) public finance insurance; 2) corporate; and 3) international and structured finance insurance. Our U.S. public finance insurance portfolio is managed through National Public Finance Guarantee Corporation (“National”), our corporate segment is managed through MBIA Inc. and several of its subsidiaries, including our service company, MBIA Services Corporation (“MBIA Services”), and our international and structured finance insurance business is primarily managed through MBIA Insurance Corporation and its subsidiaries (“MBIA Corp.”).

Current wording

MBIA Inc., together with its consolidated subsidiaries, (collectively, “MBIA”, the “Company”, “we”, “us”, or “our”) operates within the financial guarantee insurance industry. MBIA manages its business within three operating segments: 1) United States (“U.S.”) public finance insurance; 2) corporate; and 3) international and structured finance insurance. Our U.S. public finance insurance portfolio is managed through National Public Finance Guarantee Corporation (“National”), our corporate segment is managed through MBIA Inc. and several of its subsidiaries, including our service company, MBIA Services Corporation (“MBIA Services”), and our international and structured finance insurance business is managed through MBIA Insurance Corporation and its subsidiaries (“MBIA Corp.”).

Previous wording

U.S. economic activity indicators have continued to expand at a solid pace with slowing job gains and a low unemployment rate. Inflation remains elevated. With the Federal Open Market Committee (“FOMC”) seeking to achieve maximum employment and 2% inflation over the longer run, at the September of 2024 meeting, the FOMC lowered its federal funds rate target range by 50 basis points to 4.75% to 5.00%. Economic and financial market trends could impact the Company’s financial results. Economic improvement at the state and local level strengthens the credit quality of the issuers of our insured municipal bonds, improves the performance of our insured U.S. public finance portfolio and could reduce the amount of National’s potential incurred losses. Higher interest rates could adversely affect the values of our Company’s investment portfolio, but increase investment portfolio yield and income, and decrease the present value of loss reserves.

Current wording

U.S. economic activity indicators have continued to expand at a solid pace with the unemployment rate stabilizing at a low level in recent months and labor market conditions remaining solid. Inflation remains elevated. The Federal Open Market Committee (“FOMC”) seeks to achieve maximum employment and 2% inflation over the longer run, and has noted that uncertainty around the economic outlook has increased. At its most recent meeting, the FOMC maintained its federal funds rate target range at 4.25% to 4.50%. Economic and financial market trends could impact the Company’s financial results. Economic improvement at the state and local level strengthens the credit quality of the issuers of our insured municipal bonds, improves the performance of our insured U.S. public finance portfolio and could reduce the amount of National’s potential incurred losses. Higher interest rates could adversely affect the values of our Company’s investment portfolio, but increase investment portfolio yield and income, and decrease the present value of loss reserves.

Previous wording

On January 1, 2024, the Puerto Rico Electric Power Authority (“PREPA”) defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $16 million. In addition, on July 1, 2024, PREPA defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $122 million. As of September 30, 2024, National had $670 million of insured debt service outstanding related to PREPA.

Current wording

On January 1, 2025, the Puerto Rico Electric Power Authority (“PREPA”) defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $13 million. As of March 31, 2025, National had $657 million of insured debt service outstanding related to PREPA.

Previous wording

On January 31, 2023, National entered into a restructuring support agreement (“PREPA RSA”) with the Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), on behalf of itself and as the sole Title III representative of PREPA. A plan of adjustment for PREPA (the "Plan") and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, the First Circuit Court of Appeals reversed Judge Swain's prior rulings on bondholder liens and claim amounts (the "Appeal Decision"), following which the Oversight Board informed the Court that it intended to file an amendment to the Plan it believed would account for the changes required by the First Circuit opinion. On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the Unsecured Creditors Committee ("UCC") filed anen banc appeal. Both are currently pending. Following a status conference held on July 10, 2024, the Court imposed a 60-day stay of all litigation and other filings related to the amended Plan, which stay was subsequently extended until January 31, 2025, and ordered the parties into mediation. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective. In the event of a substantially different confirmed plan, National’s PREPA loss reserves and recoveries could be materially adversely affected.

Current wording

On January 31, 2023, National entered into a restructuring support agreement (“PREPA RSA”) with the Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), on behalf of itself and as the sole Title III representative of PREPA. A plan of adjustment for PREPA (the "Plan") and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, the First Circuit Court of Appeals reversed Judge Swain's prior rulings and supported bondholder liens and claim amounts (the "Appeal Decision"). On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the Unsecured Creditors Committee ("UCC") filed anen banc appeal. On November 13, 2024, the First Circuit affirmed the Appeal Decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, the Court entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule on a motion for allowance of an administrative expense claim addressing the key issues and requested the parties provide a joint status report by May 30, 2025 proposing a plan for limited discovery necessary to resolve the administrative expense motion. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective. In the event of a substantially different confirmed plan, National’s PREPA loss reserves and recoveries could be materially adversely affected.

Previous wording

The following table presents a summary of our consolidated financial results for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents a summary of our consolidated financial results for the three months ended March 31, 2025 and 2024:

Previous wording

The increase in consolidated total revenues for the three months ended September 30, 2024 compared with the same period of 2023 was principally due to favorable changes in revenues from consolidated variable interest entities ("VIEs") and net realized investment losses. These favorable changes were partially offset by unfavorable changes from our interest rate swaps and by unfavorable changes from movements in foreign exchange rates. The three months ended September 30, 2023 included $30 million of consolidated VIE losses primarily from the reclassification of credit risk losses from AOCI to net income (loss) due to early redemptions of VIE liabilities and a loss from the deconsolidation of a VIE compared with a gain of $1 million for the same period of 2024. The three months ended September 30, 2023 also included $13 million of net realized investment losses from the sales of investments with no comparable losses in 2024. The three months ended September 30, 2023 included fair value net gains on our interest rate swaps of $20 million with no comparable amounts for the same period of 2024. This variance was primarily due to the termination of substantially all of the interest rates swaps in 2023. The three months ended September 30, 2024 included foreign currency losses of $4 million on euro-denominated liabilities compared with foreign currency gains of $4 million on these liabilities for the same period of 2023. This unfavorable change was due to the weakening of the U.S. dollar against the euro in 2024 compared with the U.S. dollar strengthening against the euro in 2023.

Current wording

The increase in consolidated total revenues for the three months ended March 31, 2025 compared with the same period of 2024 was principally due to favorable changes in revenues from consolidated variable interest entities ("VIEs"), partially offset by unfavorable changes from foreign currency, net investment income and net realized investment losses from sales of investments. Consolidated VIE revenue for the three months ended March 31, 2025 was a gain of $7 million compared with a loss of $25 million for the same period of 2024. Consolidated VIE revenue for the three months ended March 31, 2025 related to a gain from a litigation trust we consolidated as a VIE. The consolidated VIE loss for the three months ended March 31, 2024 was primarily from the reclassification of credit risk losses from accumulated other comprehensive income ("AOCI") to net income (loss) due to early redemptions of VIE liabilities. The three months ended March 31, 2025 included net foreign currency related losses of $12 million primarily related to the reclassification of foreign currency translation losses from AOCI to net income (loss) due to the liquidation of a foreign subsidiary and losses on euro-denominated liabilities due to the weakening of the U.S. dollar against the euro in 2025. The three months ended March 31, 2024 included foreign currency gains of $3 million related to gains on euro-denominated liabilities due to the strengthening of the U.S. dollar against the euro in 2024. In addition, net investment income decreased $5 million for the three months ended March 31, 2025 compared with the same period of 2024 primarily due to a lower average asset base. The three months ended March 31, 2025 also included $5 million of net realized investment losses from the sales of investments compared with $1 million of losses in 2024.

Previous wording

Consolidated total expenses for the nine months ended September 30, 2024 included $171 million of losses and LAE compared with $158 million for the same period of 2023, primarily related to PREPA. In addition, the nine months ended September 30, 2024 included an incurred loss from accretion compared with an incurred benefit from the impact of changes in risk-free interest rates on the present value of loss reserves for the same period of 2023 on our insured residential mortgage-backed securities ("RMBS") exposure. Refer to the following “Losses and Loss Adjustment Expenses” sections of the U.S. Public Finance Insurance and International and Structured Finance Insurance segments for additional information on our losses and LAE.

Current wording

Consolidated total expenses for the three months ended March 31, 2025 included $8 million of losses and loss adjustment expense (“LAE”) compared with $18 million for the same period of 2024. This decrease in losses and LAE was primarily due to a decrease in losses on certain National credits, partially offset by an unfavorable change in losses and LAE on our insured first-lien residential mortgage-backed securities ("RMBS") exposure primarily related to the impact of changes in risk-free interest rates used to present value loss reserves. Refer to the following “Losses and Loss Adjustment Expenses” sections of the U.S. Public Finance Insurance and International and Structured Finance Insurance segments for additional information on our losses and LAE. In addition, operating expense decreased for the three months ended March 31, 2025 compared with the same period of 2024 primarily due to a decrease in compensation expense related to the Company's non-qualified deferred compensation plan and other employee related expenses.

Previous wording

For the three and nine months ended September 30, 2024 and 2023, our effective tax rate applied to our loss before income taxes was below the U.S. statutory tax rate of 21% due to the full valuation allowance on the changes in our net deferred tax asset, which included our net operating loss (“NOL”).

Current wording

For the three months ended March 31, 2025 and 2024, our effective tax rate applied to our loss before income taxes was below the U.S. statutory tax rate of 21% due to the full valuation allowance on the changes in our net deferred tax asset, which included our net operating loss (“NOL”).

Previous wording

As of September 30, 2024 and December 31, 2023, the Company’s valuation allowance against its net deferred tax asset was $1.3 billion and $1.2 billion, respectively. Notwithstanding the full valuation allowance on its net deferred tax asset, the Company believes that it may be able to use some of its net deferred tax asset before the expirations associated with that asset based upon expected earnings at National. Accordingly, the Company will continue to re-evaluate its net deferred tax asset on a quarterly basis. There is no assurance that the Company will reverse any of its valuation allowance on its net deferred tax asset in the future. Refer to “Note 8: Income Taxes” in the Notes to Consolidated Financial Statements for a further discussion of income taxes, including the valuation allowance against the Company’s net deferred tax asset and its accounting for tax uncertainties.

Current wording

As of March 31, 2025 and December 31, 2024, the Company’s valuation allowance against its net deferred tax asset was $1.4 billion. Notwithstanding the full valuation allowance on its net deferred tax asset, the Company believes that it may be able to use some of its net deferred tax asset before the expirations associated with that asset based upon expected earnings at National. Accordingly, the Company will continue to re-evaluate its net deferred tax asset on a quarterly basis. There is no assurance that the Company will reverse any of its valuation allowance on its net deferred tax asset in the future. Refer to “Note 8: Income Taxes” in the Notes to Consolidated Financial Statements for a further discussion of income taxes, including the valuation allowance against the Company’s net deferred tax asset and its accounting for tax uncertainties.

Previous wording

Net realized investment gains (losses), impaired securities and extinguishments of debt – We remove realized gains (losses) on the sale of investments, net investment losses related to impairment of securities and net gains (losses) on extinguishment of debt since the timing of these transactions are subject to management’s assessment of market opportunities and conditions and capital liquidity positions.

Current wording

Net realized investment gains (losses), impaired securities and extinguishment of debt – We remove realized gains (losses) on the sale of investments, net investment losses related to impairment of securities and net gains (losses) on extinguishment of debt since the timing of these transactions are subject to management’s assessment of market opportunities and conditions and capital liquidity positions.

Previous wording

The following table presents our adjusted net income (loss) and adjusted net income (loss) per diluted common share and provides a reconciliation of GAAP net income (loss) attributable to MBIA Inc. to adjusted net income (loss) for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents our adjusted net income (loss) and adjusted net income (loss) per diluted common share and provides a reconciliation of GAAP net income (loss) to adjusted net income (loss) for the three months ended March 31, 2025 and 2024:

Previous wording

In addition to GAAP book value per share, for internal purposes management also analyzes adjusted book value (“ABV”) per share, changes to which we view as an important indicator of financial performance. ABV is also used by management in certain components of management’s compensation. Since many of the Company’s investors and analysts continue to use ABV to evaluate MBIA’s share price and as the basis for their investment decisions, we present GAAP book value per share as well as the individual adjustments used by management to calculate its internal ABV metric.g

Current wording

In addition to GAAP book value per share, for internal purposes management also analyzes adjusted book value (“ABV”) per share, changes to which we view as an important indicator of financial performance. ABV is also used by management in certain components of management’s compensation. Since many of the Company’s investors and analysts continue to use ABV to evaluate MBIA’s share price and as the basis for their investment decisions, we present GAAP book value per share as well as the individual adjustments used by management to calculate its internal ABV metric.

Previous wording

Our U.S. public finance insurance portfolio is managed through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due or, in the event National has exercised, at its discretion, the right to accelerate the payment under its policies upon the acceleration of the underlying insured obligations due to default or otherwise. National’s guarantees insure municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, healthcare institutions, higher educational facilities, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, user fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams. As of September 30, 2024, National had total insured gross par outstanding of $25.9 billion.

Current wording

Our U.S. public finance insurance portfolio is managed through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due or, in the event National has exercised, at its discretion, the right to accelerate the payment under its policies upon the acceleration of the underlying insured obligations due to default or otherwise. National’s guarantees insure municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, healthcare institutions, higher educational facilities, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, user fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams. As of March 31, 2025, National had total insured gross par outstanding of $24.8 billion.

Previous wording

The following table presents our U.S. public finance insurance segment results for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents our U.S. public finance insurance segment results for the three months ended March 31, 2025 and 2024:

Previous wording

NET PREMIUMS EARNED Net premiums earned on financial guarantees represent gross premiums earned net of premiums ceded to reinsurers, and include scheduled premium earnings and premium earnings from refunded issues. Refunding activity over the past several years has accelerated premium earnings in prior years and reduced the amount of scheduled premiums that would have been earned in the current year. Refunding activity can vary significantly from period to period based on issuer refinancing behavior. Included in net premiums earned for the three months ended September 30, 2024 and 2023, were scheduled premiums earned of $7 million and $6 million, respectively. Included in net premiums earned for the nine months ended September 30, 2024 and 2023, were scheduled premiums earned of $20 million and $21 million, respectively.

Current wording

NET PREMIUMS EARNED Net premiums earned on financial guarantees represent gross premiums earned net of premiums ceded to reinsurers, and include scheduled premium earnings and premium earnings from refunded issues. Refunding activity over the past several years has accelerated premium earnings in prior years and reduced the amount of scheduled premiums that would have been earned in the current year. Refunding activity can vary significantly from period to period based on issuer refinancing behavior. For the three months ended March 31, 2025 and 2024, scheduled premiums earned were $6 million and $7 million, respectively, and refunded premiums earned were not material.

Previous wording

NET INVESTMENT INCOME The decrease in net investment income for the three and nine months ended September 30, 2024 compared with the same periods of 2023 were primarily due to a lower average invested asset base as a result of the dividend payments to National's ultimate parent, MBIA Inc., in 2023. This decrease was partially offset by higher yields on investments.

Current wording

NET INVESTMENT INCOME The decrease in net investment income for the three months ended March 31, 2025 compared with the same period of 2024 was primarily due to a lower average invested asset base.

Previous wording

NET REALIZED INVESTMENT GAINS (LOSSES) The net realized investment losses for the nine months ended September 30, 2023 related to sales of securities from the ongoing management of our U.S. public finance investment portfolio, including to generate liquidity to pay claims.

Current wording

NET REALIZED INVESTMENT GAINS (LOSSES) Net realized investment losses are primarily related to sales of securities from the ongoing management of our U.S. public finance investment portfolio, including to generate liquidity to pay claims.

Previous wording

For the three months ended September 30, 2024, losses and LAE activity was primarily due to accretion partially offset by a decline in risk-free rates, which caused future liabilities, net of recoveries to increase related to our PREPA exposure. For the nine months ended September 30, 2024, losses and LAE incurred primarily related to changes in PREPA reserves as a result of current developments in the PREPA remediation. Refer to the following “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposures. In addition, the nine months ended September 30, 2024 incurred loss included reserves on a U.S. public finance lease-backed transaction.

Current wording

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three months ended March 31, 2025, loss and LAE activity was primarily due to accretion as well as a decline in risk-free rates, which caused future liabilities, net of recoveries to increase related to our PREPA exposure. Refer to the following “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposures.

Previous wording

For three and nine months ended September 30, 2023, losses and LAE incurred related to updating PREPA scenarios to reflect the Amended PSA, which included extending the effective date of a settlement until 2024.

Current wording

For the three months ended March 31, 2024, losses and LAE incurred primarily related to PREPA as a result of extending the timing of the effective date of a settlement, and to a lesser extent, establishing reserves on a lease-backed transaction.

Previous wording

The changes to insurance loss recoverable and loss and LAE reserves as of September 30, 2024 compared with December 31, 2023 were primarily due to changes related to PREPA as discussed above. In addition, the increase in loss and LAE reserves included reserves on a lease-backed transaction and was partially offset by the January and July of 2024 PREPA claim payments.

Current wording

The insurance loss recoverable increased compared with December 31, 2024 as a result of reclassifying recoveries from loss and LAE reserve as a result of the payment of a leased-backed transaction, as well as PREPA as discussed above. The loss and LAE reserves as of March 31, 2025 decreased compared with December 31, 2024 primarily due to the January of 2025 PREPA claim payments, partially offset by accretion as well as a decline in risk-free rates related to PREPA as discussed above.

Previous wording

LOSSES AND LOSS ADJUSTMENT EXPENSES Our U.S. public finance insured portfolio management group is responsible for monitoring our U.S. public finance segment’s insured obligations. The level and frequency of monitoring of any insured obligation depends on the type, size, rating and our assessed performance of the insured issue. Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for additional information related to the Company’s insurance loss recoverables and loss and LAE reserves.

Current wording

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for additional information related to the Company’s insurance loss reserves and recoverables and loss reserving process.

Previous wording

POLICY ACQUISITION COSTS AND OPERATING EXPENSES U.S. public finance insurance segment expenses for the three and nine months ended September 30, 2024 and 2023 are presented in the following table:

Current wording

POLICY ACQUISITION COSTS AND OPERATING EXPENSES U.S. public finance insurance segment expenses for the three months ended March 31, 2025 and 2024 are presented in the following table:

Previous wording

On June 23, 2023, the Oversight Board filed a fiscal plan for PREPA for FY2023, which provided for approximately $2.4 billion of distributions to PREPA bondholders. The University of Puerto Rico (the "University") is not a debtor in Title III and continues to be current on its debt service payment. However, the University is subject to a standstill agreement with its senior bondholders, which has been extended to November 30, 2024. National is not a party to the standstill agreement. As of September 30, 2024, National had $62 million of insured debt service outstanding related to the University.

Current wording

On June 23, 2023, the Oversight Board filed a fiscal plan for PREPA for FY2023, which provided for approximately $2.4 billion of distributions to PREPA bondholders. The University of Puerto Rico (the "University") is not a debtor in Title III and continues to be current on its debt service payment. However, the University is subject to a standstill agreement with its senior bondholders, which has been extended to May 31, 2025. National is not a party to the standstill agreement. As of March 31, 2025, National had $61 million of insured debt service outstanding related to the University.

Previous wording

On January 31, 2023, National entered into the PREPA RSA with the Oversight Board, on behalf of itself and as the sole Title III representative of PREPA. The Plan and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, following the Appeal Decision, the Oversight Board informed the Court that it intended to file an amendment to the Plan it believed would account for the changes required by the First Circuit opinion. On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the UCC filed anen banc appeal. Both are currently pending. Following a status conference held on July 10, 2024, the Court imposed a 60-day stay of all litigation and other filings related to the amended Plan, which stay was subsequently extended until January 31, 2025, and ordered the parties into mediation. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended.

Current wording

On January 31, 2023, National entered into the PREPA RSA with the Oversight Board, on behalf of itself and as the sole Title III representative of PREPA. The Plan and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, following the Appeal Decision, the Oversight Board informed the Court that it intended to file an amendment to the Plan it believed would account for the changes required by the First Circuit opinion. On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the UCC filed anen banc appeal. On November 13, 2024, the First Circuit affirmed its decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule on a motion for allowance of an administrative expense claim addressing the key issues and requested the parties provide a joint status report by May 30, 2025 proposing a plan for limited discovery necessary to resolve the administrative expense motion. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended.

Previous wording

The following table presents our scheduled gross debt service due on our PREPA insured exposures as of September 30, 2024, for the three months ending December 31, 2024, for each of the subsequent four years ending December 31, and thereafter:

Current wording

The following table presents our scheduled gross debt service due on our PREPA insured exposures as of March 31, 2025, for the nine months ending December 31, 2025, for each of the subsequent four years ending December 31, and thereafter:

Previous wording

The following table summarizes the consolidated results of our corporate segment for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table summarizes the consolidated results of our corporate segment for the three months ended March 31, 2025 and 2024:

Previous wording

The three and nine months ended September 30, 2023 included fair value net gains of $20 million and $22 million, respectively, on interest rate swaps with no comparable material amounts for the same periods of 2024. The 2023 gains were due to an increase in interest rates on swaps that we received floating rates. Substantially all of the interest rates swaps were terminated in the second half of 2023. In addition, the three months ended September 30, 2024 included foreign currency losses of $4 million on euro-denominated liabilities compared with foreign currency gains of $5 million on these liabilities for the same period of 2023. This decrease was due to the U.S. dollar weakening against the euro in 2024 compared with the U.S. dollar strengthening against the euro in 2023.

Current wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The three months ended March 31, 2025 included foreign currency losses of $4 million on euro-denominated liabilities compared with foreign currency gains of $3 million on these liabilities for the same period of 2024. This decrease was due to the U.S. dollar weakening against the euro in 2025 compared with the U.S. dollar strengthening against the euro in 2024. In addition, the three months ended March 31, 2025 included $2 million of fair value losses compared with $4 million of fair value gains for the same period of 2024, primarily on investments held in our non-qualified deferred compensation plan.

Previous wording

MBIA Corp. insures sovereign-related and sub- sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. MBIA Corp. also insures structured finance and asset-backed obligations repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, consumer loans and structured settlements. MBIA Insurance Corporation insures the investment agreements written by MBIA Inc., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Insurance Corporation would be required to make such payments under its insurance policies. MBIA Insurance Corporation also insures debt obligations of GFL and obligations under certain types of derivative contracts. As of September 30, 2024, MBIA Corp.’s total insured gross par outstanding was $2.5 billion. In addition, MBIA Corp. consolidates insured transactions as VIEs if it determines it is the primary beneficiary, and deconsolidates such VIEs when it is no longer the primary beneficiary.

Current wording

MBIA Corp. insures sovereign-related and sub- sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. MBIA Corp. also insures structured finance and asset-backed obligations repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, consumer loans and structured settlements. MBIA Insurance Corporation insures the investment agreements written by MBIA Inc., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Insurance Corporation would be required to make such payments under its insurance policies. MBIA Insurance Corporation also insures debt obligations of GFL and obligations under certain types of derivative contracts. As of March 31, 2025, MBIA Corp.’s total insured gross par outstanding was $2.3 billion. In addition, MBIA Corp. consolidates insured transactions as VIEs if it determines it is the primary beneficiary, and deconsolidates such VIEs when it is no longer the primary beneficiary.

Previous wording

The following table presents our international and structured finance insurance segment results for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents our international and structured finance insurance segment results for the three months ended March 31, 2025 and 2024:

Previous wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for the nine months ended September 30, 2024 was primarily due to fair value losses on investments for which the fair value option was elected. The net losses for the nine months ended September 30, 2023 was primarily driven by foreign exchange losses on the revaluation of non-U.S. dollar insurance balances.

Current wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for the three months ended March 31, 2025 was primarily due to the reclassification of foreign currency translation losses from AOCI to net income (loss) due to the liquidation of a foreign subsidiary. The net losses for the three months ended March 31, 2024 was primarily due to fair value losses on investments for which the fair value option was elected.

Previous wording

For the three months ended September 30, 2024, losses incurred primarily related to a decline in risk-free rates which caused future liabilities, net of recoveries to increase and accretion of loss reserves on our insured RMBS transactions. This was partially offset by a decline in the secured overnight financing rate ("SOFR"), which decreased floating rate liabilities. For the nine months ended September 30, 2024, the incurred loss primarily related to accretion of our insured RMBS loss reserves.

Current wording

For the three months ended March 31, 2024, the incurred loss benefit primarily related to an in increase in risk-free rates used to discount loss reserves primarily on insured RMBS transactions, which caused the present value of loss reserves, net of recoveries, to decline, partially offset by an increase in the secured overnight financing rate ("SOFR"), which increased estimated interest expense on floating rate liabilities on our insured RMBS transactions, and by accretion.

Previous wording

As a result of the consolidation of VIEs, losses and LAE excluded a losses and LAE benefit of $0.2 million and losses and LAE of $21 million for the three and nine months ended September 30, 2024, respectively, and excluded losses and LAE of $1 million and a losses and LAE benefit of $31 million for the three and nine months ended September 30, 2023, respectively, as VIE losses and LAE are eliminated in consolidation.

Current wording

As a result of the consolidation of VIEs, loss and LAE excludes losses and LAE expense of $1 million and a losses and LAE benefit of $4 million for the three months ended March 31, 2025 and 2024, respectively, as VIE losses and LAE are eliminated in consolidation.

Previous wording

The insurance loss recoverable primarily relates to reimbursement rights arising from the payment of claims on MBIA Corp.’s policies insuring certain RMBS transactions. Such payments also entitle MBIA Corp. to exercise certain rights and remedies to seek recovery of its reimbursement entitlements.

Current wording

The insurance loss recoverable primarily relates to reimbursement rights arising from the payment of claims on MBIA Corp.’s policies insuring certain RMBS transactions. Such payments also entitle MBIA Corp. to exercise certain rights and remedies to seek recovery of its reimbursement entitlements. The increase in Loss and LAE reserves from December 31, 2024 primarily relates to a decrease in risk-free rates and accretion on our insured RMBS transactions, as discussed above.

Previous wording

LOSSES AND LOSS ADJUSTMENT EXPENSES Our international and structured finance insured portfolio management group is responsible for monitoring international and structured finance insured obligations. The level and frequency of monitoring of any insured obligation depends on the type, size, rating and our assessed performance of the insured issue. Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for a description of the Company’s loss reserving policy and additional information related to its insurance loss recoverables and loss and LAE reserves.

Current wording

Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for a description of the Company’s loss reserving policy and additional information related to its insurance loss recoverables and loss and LAE reserves.

Previous wording

POLICY ACQUISITION COSTS AND OPERATING EXPENSES International and structured finance insurance segment expenses for the three and nine months ended September 30, 2024 and 2023 are presented in the following table:

Current wording

POLICY ACQUISITION COSTS AND OPERATING EXPENSES International and structured finance insurance segment expenses for the three months ended March 31, 2025 and 2024 are presented in the following table:

Previous wording

INTEREST EXPENSE Interest expense relates to MBIA Corp.’s surplus notes that are indexed to 3-month SOFR. During the third quarter of 2023, the Company transitioned from the previously indexed 3-month London Interbank Offered Rate to the 3-month SOFR plus 0.26161%. The increase in interest expense for the nine months ended September 30, 2024 compared with the same period of 2023 was due to an increase in interest rates. Refer to the following “Liquidity and Capital Resources” section for more information about MBIA Corp.’s surplus notes.

Current wording

INTEREST EXPENSE Interest expense relates to MBIA Corp.’s surplus notes that are indexed to 3-month SOFR. The decrease in interest expense for the three months ended March 31, 2025 compared with the same period of 2024 was due to a decrease in SOFR. Refer to the following “Liquidity and Capital Resources” section for more information about MBIA Corp.’s surplus notes.

Previous wording

The credit quality of our international and structured finance insured portfolio is assessed in the same manner as our U.S. public finance insured portfolio. As of September 30, 2024 and December 31, 2023, 23% and 26%, respectively, of our international and structured finance insured portfolio was rated below investment grade, before giving effect to MBIA’s guarantees, based on MBIA’s internal ratings, which are generally more current than the underlying ratings provided by S&P and Moody’s for this subset of our insured portfolio. As of September 30, 2024, below investment grade insurance policies primarily include our first-lien RMBS exposures.

Current wording

The credit quality of our international and structured finance insured portfolio is assessed in the same manner as our U.S. public finance insured portfolio. As of March 31, 2025 and December 31, 2024, 28% and 24%, respectively, of our international and structured finance insured portfolio was rated below investment grade, before giving effect to MBIA’s guarantees, based on MBIA’s internal ratings, which are generally more current than the underlying ratings provided by S&P and Moody’s for this subset of our insured portfolio. As of March 31, 2025, below investment grade insurance policies primarily include our first-lien RMBS exposures.

Previous wording

MBIA Corp. insures RMBS backed by residential mortgage loans, including first-lien alternative A-paper and subprime mortgage loans directly through RMBS securitizations. As of September 30, 2024 and December 31, 2023, MBIA Corp. had $565 million and $596 million, respectively, of first-lien RMBS gross par outstanding. These amounts include the gross par outstanding related to transactions that the Company consolidates under accounting guidance for VIEs and includes international exposure of $37 million and $39 million, as of September 30, 2024 and December 31, 2023, respectively. In addition, during the nine months ended September 30, 2024, MBIA Corp. terminated all of its remaining ABS CDO exposure. As of December 31, 2023, MBIA Corp. insured $117 million of ABS CDOs.

Current wording

MBIA Corp. insures RMBS backed by residential mortgage loans, including first-lien alternative A-paper and subprime mortgage loans directly through RMBS securitizations. As of March 31, 2025 and December 31, 2024, MBIA Corp. had $540 million and $554 million, respectively, of first-lien RMBS gross par outstanding. These amounts include the gross par outstanding related to transactions that the Company consolidates under accounting guidance for VIEs and includes international exposure of $31 million and $36 million, as of March 31, 2025 and December 31, 2024, respectively.

Previous wording

As of September 30, 2024, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $693 million compared with $782 million as of December 31, 2023. Under National’s reinsurance agreement with MBIA Corp., if a reinsurer of MBIA Corp. is unable to pay claims ceded by MBIA Corp. on U.S. public finance exposure, National will assume liability for such ceded claim payments. For a further discussion of the Company’s reinsurance, refer to “Note 13: Insurance in Force” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

As of March 31, 2025, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $648 million compared with $671 million as of December 31, 2024. Under National’s reinsurance agreement with MBIA Corp., if a reinsurer of MBIA Corp. is unable to pay claims ceded by MBIA Corp. on U.S. public finance exposure, National will assume liability for such ceded claim payments. For a further discussion of the Company’s reinsurance, refer to “Note 12: Insurance in Force” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Information about our consolidated cash flows by category is presented on our consolidated statements of cash flows. The following table summarizes our consolidated cash flows for the nine months ended September 30, 2024 and 2023:

Current wording

Information about our consolidated cash flows by category is presented on our consolidated statements of cash flows. The following table summarizes our consolidated cash flows for the three months ended March 31, 2025 and 2024: