MBIA Inc. Subsidiary, National Public Finance Guarantee Corporation, Enters Into Agreement In Principle Regarding Puerto Rico Electric Power Authority

Rhea-AI Summary

MBIA Inc. (NYSE: MBI) announced on December 16, 2022, that its subsidiary, National Public Finance Guarantee Corporation, reached an agreement in principle with the Financial Oversight & Management Board for Puerto Rico regarding its claim in the Title III proceeding of the Puerto Rico Electric Power Authority (PREPA). This agreement is seen as a significant step towards resolving National's last major Puerto Rico credit issue, potentially enhancing shareholder value. The agreement is pending documentation and must be confirmed by the Title III Court.

Positive

• Agreement in principle reached with the Financial Oversight & Management Board for Puerto Rico regarding PREPA.
• Seen as a significant step towards resolving National's last major Puerto Rico credit issue.
• May enhance shareholder value.

Negative

• Agreement subject to documentation and Title III Court confirmation.

PURCHASE, N.Y.--(BUSINESS WIRE)-- MBIA Inc. (NYSE:MBI) (the Company) today reported that on December 16, 2022, the Company’s wholly-owned indirect subsidiary, National Public Finance Guarantee Corporation (“National”) entered into an agreement in principle with the Financial Oversight & Management Board for Puerto Rico ("FOMB") relating to National's claim in the Title III proceeding of the Puerto Rico Electric Power Authority ("PREPA"). The FOMB's December 16, 2022 press release announcing the filing of the PREPA Plan of Adjustment referred to the agreement in principle, which remains subject to documentation, but no description of its terms. Bill Fallon, MBIA’s Chief Executive Officer noted, “We are pleased to have reached an agreement in principle with regards to PREPA, National's last remaining material Puerto Rico credit. While the agreement remains subject to documentation and inclusion in a Plan that must be confirmed by the Title III Court, we believe this is a positive development that further positions National to achieve a permanent resolution of PREPA and the Company to take important steps to enhance shareholder value."

Forward-Looking Statements

This release includes statements that are not historical or current facts and are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe,, "anticipate," "project," "plan," "expect," "estimate," "intend," "will," "will likely result," "looking forward," or "will continue," and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other factors, the possibility that MBIA Inc. or National will experience increased credit losses or impairments on public finance obligations issued by state, local and territorial governments and finance authorities that are experiencing unprecedented fiscal stress; the possibility that loss reserve estimates are not adequate to cover potential claims; MBIA Inc.'s or National's ability to fully implement their strategic plan; changes in general economic and competitive conditions; and the impact on our insured portfolios or business operations caused by the global spread of the novel coronavirus COVID-19. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying MBIA Inc.'s or National's forward-looking statements are discussed under the "Risk Factors" section in MBIA Inc.'s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which may be updated or amended in MBIA Inc.'s subsequent filings with the Securities and Exchange Commission. MBIA Inc. and National caution readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. National and MBIA Inc. undertake no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.

MBIA Inc., headquartered in Purchase, New York, is a holding company whose subsidiaries provide financial guarantee insurance for the public and structured finance markets. Please visit MBIA’s website at www.mbia.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221219005252/en/

MBIA Inc.

Greg Diamond, 914-765-3190

Managing Director

Head of Investor and Media Relations

greg.diamond@mbia.com

Source: MBIA Inc.

FAQ

What is the significance of the December 16, 2022, agreement for MBIA Inc.?

The agreement in principle with the Financial Oversight & Management Board for Puerto Rico is significant as it addresses MBIA's subsidiary's last major credit issue with Puerto Rico's Electric Power Authority, potentially leading to improved financial outcomes.

How does the agreement with the Financial Oversight & Management Board affect MBIA's shareholders?

This agreement may enhance shareholder value by paving the way for a resolution of outstanding financial claims related to Puerto Rico's Electric Power Authority.

What challenges remain after the agreement reached by MBIA Inc.?

The agreement remains subject to documentation and must be confirmed by the Title III Court, which presents a challenge to finalizing the resolution.

What is National Public Finance Guarantee Corporation's role in the agreement?

National Public Finance Guarantee Corporation, a subsidiary of MBIA, represents the company's interests in the Title III proceeding related to the Puerto Rico Electric Power Authority.