MBIA Inc.

Welcome to the NBIA Inc. Second Quarter 2020 Financial Results Conference Call. I would now like to turn the call over to Greg Diamond, Managing Director of Investor and Media Relations at NBIA. Please go ahead, sir.

Thank you, Maria. Welcome to NBIA's conference call for our Second Quarter 2020 Financial Results. After the market closed yesterday, we issued and posted several items on our website, including our financial results, 10Q, quarterly operating supplement, and statutory financial statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance portfolios. Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K, 10-Qs, and other SEC filings, as our company's definitive disclosures are incorporated in those documents. We urge investors to read our most recent 10-K and subsequent 10-Qs as they contain our most current disclosures about the company and its financial and operating results. Those documents also contain information that may not be addressed on today's call. The definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K and 10-Qs as well as our financial results report and our quarterly operating supplement. The recorded replay of today's call will become available approximately two hours after the end of the call, and the information for accessing it is included in last week's press announcement and in the financial results that we posted on the MBIE website yesterday. Now for our safe harbor. Our remarks on today's conference call may contain forward-looking statements. Important factors, such as general market conditions and the competitive environment, could cause our actual results to differ materially from the projected results referenced in our forward-looking statements. Risk factors are detailed in our 10-K and 10-Q, which are available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements. The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Bill Fallon and Anthony McKiernan will provide introductory comments, which will be followed by a question and answer session. Now, here is Bill Fallon.

Thanks, Greg. Good morning, everyone. Thank you for being with us today. For the second quarter of 2020, The company's net loss was primarily caused by loss and loss adjustment expenses, with slightly more than half of those loss expenses recorded by National Public Finance Guarantee Corporation and the balance by NBIA Insurance Corporation. These losses largely resulted from National's insured Puerto Rico exposure and reductions in NBIA Corp.'s estimated recoveries on the Zohar CDOs. The losses for the second quarter were not meaningfully influenced by the COVID-19 pandemic. However, we will continue to review our insured portfolio to assess the impact from COVID-19 as the pandemic evolves. National's Puerto Rico exposure is largely comprised of three credits. The Commonwealth's General Obligation Bonds, the Puerto Rico Electric Power Authority, or PREPA, and the Puerto Rico Highway and Transportation Authority, or HTA. There have been no meaningful changes to our PREPA and GEO credits in the last three months. Regarding HTA, last month, the Title III Court denied our motion seeking to lift the bankruptcy stay to pursue our property interest. We disagree with that decision and tend to appeal it once it is final. The provisions of the HTA revenue bonds are widely accepted and used across the public finance markets. The court's ruling could make it more difficult for state and local governments to finance infrastructure projects at attractive rates. Last week, our litigation against certain underwriters of some of our insured Puerto Rico debt was remanded back to the Commonwealth Court where we had first filed it. The case will now proceed and the underwriter banks will soon respond to the complaint. Most of the credits in our insurance portfolios continue to perform consistent with our expectations. The outstanding gross par of the insured portfolios continues to reduce, where National's insured portfolio has further declined to $46 billion, down $1.5 billion from last quarter. At June 30, 2020, National's leverage ratio of gross par to statutory capital was 23 to 1. During the second quarter, National purchased 9.8 million shares of MBIA's common stock, and an average price of $7.32 per share. Year to date, through July 29, 2020, National purchased 22.6 million MBI shares and an average price of $7.58 per share. As of July 29, 2020, MBI had 57.8 million shares outstanding and $27 million of remaining capacity under its existing share repurchase authorization. Now, Anthony will cover the financial results.