MBIA Inc.

Welcome to the MBIA, Inc. Fourth Quarter and Full Year 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 MBIA. Please go ahead, sir.

Thank you, Maria. Welcome to MBIA's Conference Call for our Full Year and Fourth Quarter 2020 Financial Results. After the market closed yesterday, we issued and posted several items on our websites, including our financial results, 10-K, 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 in the company's 10-K and other SEC filings, as our company's definitive disclosures are incorporated in those documents. We urge investors to read our 10-K as it contains our most current disclosures about the company and its financial and operating results. The 10-K also contains 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, as well as our financial results report in our quarterly operating supplements. 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 was included in last week's press announcement and in the financial results report that was posted yesterday on MBIA's websites. Now I'll read our safe harbor disclosure statement. 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, which is 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 some introductory comments, and then a question and answer session will follow. Now, here is Bill Fallon. Thanks, Greg.

Good morning, everyone. Thank you for being with us today. After the fourth quarter ended, we had two significant developments of note. The RMBS put back several with Credit Suisse, and the revised Plan Support Agreement, or PSA, for the Puerto Rico GEO debt. The RMBS put-back settlement with Credit Suisse came after more than 11 years of litigation and resulted in Credit Suisse paying NBA Insurance Corp. $600 million. Regarding the new PSA for Puerto Rico, National was the signing party to this new agreement that was announced last week. While both of these developments occurred in 2021, they were both reflected in our fourth quarter and full year 2020 financial results. For the Credit Suisse settlement, the $600 million recovery was reflected in the relevant NBIA Insurance Corp accounts. For the Puerto Rico PSA, its economics were reflected within the cash flow scenarios and probability weightings that we used to calculate Nationals' loss expenses and reserves. Turning to our bottom line financial results, The company's $81 million net loss for the fourth quarter of 2020 was caused primarily by the $103 million of loss and loss adjustment expense for the quarter. NBI Insurance Corp. accounted for approximately 70% of the loss expense, which primarily resulted from reduced estimated recoveries on the Zohar CDOs. As we have noted previously, we do not believe the financial performance of NBI Insurance Corp. as an impact on NBI Inc. shareholders. The remaining 30% of loss expense that resulted from National was primarily due to the increase in risk-free discount rates that caused a reduction in the present value of the estimated recoveries on claims largely related to Puerto Rico credits. Last week, when National became a signing party to the revised Puerto Rico PSA, approximately 62% of bondholders supported the agreement. Subsequently, the Federal Oversight and Management Board has announced that it has achieved the PSA threshold attainment level of 70% bondholder support for the revised agreement. Please note that National has the unilateral right to terminate its participation in the revised PSA on or prior to March 31st, 2021. In the meanwhile, we continue to support the implementation of the Restructuring Support Agreement for the Puerto Rico Electric Power Authority, or PREPA. and pursue resolutions of the debt obligations of the Puerto Rico Highway and Transportation Authority, or HTA. Regarding national litigation against certain underwriters of some of its insured Puerto Rico debt, we await a resolution of the defendant's motion to dismiss the case, which was fully briefed as of November 30th, 2020. 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. National's insured portfolio declined to $42 billion at year end, down $2 billion from the previous quarter's end. At December 31, 2020, National's leverage ratio gross par to statutory capital was 21 to 1. During 2020, National acquired 26.4 million shares of MBA's common stock and an average price of $7.50 per share. As of February 22nd, 2021, NBI had 53.7 million shares outstanding. Since the end of 2016, the company has repurchased 86 million shares of NBI common stock, which we believe has contributed substantial value to NBI Inc. shareholders. Now, Anthony will cover the financial results.