Thank you, Leslie. Welcome to MBIA's financial results conference call.

After the market closed yesterday, we issued and posted several items on our websites, including our financial results, 10-Q, quarterly operating supplement, and statutory financial statements for both MBIA Insurance Corporation and the National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance companies' insured 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 10-K and 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 definition 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 the quarterly operating supplement.

The recorded replay of today's call will become available on the MBIA website approximately two hours after the end of the call. Now, here is 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 and 10-Qs, 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 Joe Schachinger will provide 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. While our third quarter 2026 net loss was greater than last year's third quarter loss, our year-to-date results compare favorably to last year.

Joe will provide more details on this quarter's results shortly. Regarding our operations, our priority continues to be resolving National's PREPA exposure, which remains at $390 million of gross par outstanding as of September 30th, 2026, and $35 million of saleable PREPA bankruptcy claims consisting of custodial receipts and uninsured bonds.

Since our last conference call, the US District Court for Puerto Rico granted permanent injunctive relief to three of the Oversight Board members that President Trump attempted to fire. The Title III court scheduled oral argument for November 18th, 2026 on summary judgment for the accounting counterclaim regarding the calculation of net revenue.

The PREPA bondholders petitioned the First Circuit Court of Appeals for an appeal on the Title III court's stay of the bondholders' filing to lift the automatic stay and appoint a receiver for PREPA, and oral arguments were heard on the administrative claim appeal to the First Circuit and a ruling is pending. Regarding the balance of National's insured portfolio, those credits have continued to perform generally consistent with our expectations.

The gross par amount outstanding for National's insured portfolio has declined by approximately $2.6 billion from year-end 2025 to about $19.7 billion at September 30th, 2026. National's leverage ratio of gross par to statutory capital was 20 to 1 at the end of the quarter, down from 24 to 1 at year-end 2025.

As of September 30th, 2026, National had total claims-paying resources of $1.4 billion and statutory capital and surplus of $974 million. Now Joe will provide additional comments about our financial results.

Thank you, Bill, and good morning, everyone. I will begin with a review of our third quarter 2026 GAAP and non-GAAP results, followed by an overview of our holding company liquidity and our statutory results.

The company reported a consolidated GAAP net loss of $24 million, or a negative 49 cents per share, for the third quarter of 2026, compared with a consolidated GAAP net loss of $8 million, or a negative 17 cents per share, for the third quarter of 2025. The larger GAAP net loss in the current quarter was primarily attributable to a smaller loss and LAE benefit.

In the third quarter of 2026, we recorded a loss and LAE benefit of $12 million. This benefit was largely driven by the impact of an increase in the interest rates used to discount our loss reserves, which lowered the present value of those reserves, principally with respect to MBIA Insurance Corp.'

s first-lien RMBS exposures. By comparison, in the third quarter of 2025, we recorded a loss and LAE benefit of $50 million.

That benefit was primarily driven by revising our PREPA loss scenarios to reflect developments at that time, including National's sale of PREPA bankruptcy claims at prices above our previous estimates. The company's adjusted net loss, which is a non-GAAP measure, was $3 million, or a negative 6 cents per share, for the third quarter of 2026, compared with adjusted net income of $51 million, or $1.03 per share, for the third quarter of 2025.

The unfavorable variance was primarily driven by $3 million of losses and LAE at National in the current quarter, reflecting the accrual of LAE and the accretion of loss reserves, compared with a $54 million loss and LAE benefit in the third quarter of 2025, primarily from the favorable developments associated with National's PREPA reserves and recoveries. As of September 30th, 2026, MBIA Inc.'

s book value per share was negative $46.87 per share, reflecting a decrease of $2.60 per share from year-end 2025. This decrease was primarily due to our consolidated GAAP net loss of $110 million for the first nine months of 2026 and an increase in unrealized losses on our investment portfolios recorded in other comprehensive income.

The increase in unrealized investment losses largely resulted from higher interest rates, which reduced the fair value of our fixed-income investments. Included in MBIA Inc.'

s book value per share as of September 30th, 2026 is a negative $54.87 per share of MBIA Insurance Corp.' s book value.

I will now turn to the corporate segment balance sheet. The corporate segment, which primarily comprises the activities of the holding company, MBIA Inc., had total assets of approximately $577 million as of September 30th, 2026.

Within this total are the following material assets: unencumbered cash and liquid assets held by MBIA Inc. totaled $335 million, compared with $357 million at December 31st, 2025.

The decrease since year-end 2025 primarily reflects ongoing debt service payments and operating expenses, partially offset by investment income. We continue to manage holding company liquidity carefully, with a primary focus on meeting our outstanding obligations and preserving our financial flexibility.

In addition to the unencumbered cash and liquid assets, the corporate segment's assets included approximately $124 million of assets at market value pledged to guaranteed investment agreement contracts holders. These assets fully collateralize the principal amounts of those contracts.

The segment's assets also included $70 million of assets at MBIA Services Corp., our management services company, to support its operating obligations. I'll now turn to the statutory results of our insurance companies, beginning with National.

National reported statutory net income of $18 million for the third quarter of 2026, compared with statutory net income of $73 million for the third quarter of 2025. The unfavorable variance was primarily attributable to loss and LAE activity.

National recorded $4 million of statutory loss and LAE this quarter, compared with a $56 million loss and LAE benefit in the third quarter of 2025. As noted earlier, the expense in the current quarter reflects the accrual of LAE and accretion of reserves, while the benefit in the third quarter of 2025 was primarily driven by adjustments to our PREPA loss scenarios and assumptions and the sale of PREPA bankruptcy claims at prices above our previous estimates.

As of September 30th, 2026, National statutory capital was $974 million, up $37 million compared with December 31st, 2025. The increase was primarily driven by National's statutory net income of $39 million for the first nine months of 2026.

As of September 30th, 2026, National's claims-paying resources were $1.4 billion, unchanged from year-end 2025. Now I'll turn to MBIA Insurance Corp.

MBIA Insurance Corp. reported a statutory net loss of $3 million for the third quarter of 2026, compared with a statutory net loss of $25 million for the third quarter of 2025.

The favorable variance was primarily attributable to lower loss and LAE. MBIA Insurance Corp.

reported loss and LAE of $4 million in the current quarter, compared with $25 million in the third quarter of 2025. The larger loss and LAE in the third quarter of 2025 primarily reflected reserve adjustments associated with lower expected recoveries of paid claims relating to the Zohar CDOs.

As of September 30th, 2026, MBIA Insurance Corp.' s statutory capital was $102 million, reflecting an increase of $23 million from year-end 2025.

The increase was principally driven by MBIA Insurance Corp.' s statutory net income of $25 million for the first nine months of 2026.

Claims-paying resources totaled $335 million as of September 30th, 2026, increasing $18 million from year-end 2025. MBIA Insurance Corp.'

s insured gross par outstanding was just under $1.8 billion as of September 30th, 2026, declining approximately 13% from year-end 2025, reflecting the scheduled amortization of the insured portfolio. Now, we will turn the call over to the operator to begin the question-and-answer session.

Hey, good morning, guys. First question, what was the amount of the as-of-right dividend that National paid to MBIA Inc.

in the fourth quarter, I guess usually in October, versus the $63 million as-of-right dividend last year?

Hi, this is Joe. We have not yet paid the as-of-right dividend.

We typically pay it in December, Tommy, not October. We do expect to pay that dividend this coming December, and we expect it to be in a similar amount as the last two years, perhaps slightly higher.

Got it. Then, from your vantage point, does the Democratic sweep in the midterms change the outlook for how you expect the Oversight Board to get constructed in terms of nominations from the different House and Senate leaders?

Do you have a viewpoint on how that could ultimately impact how creditor-friendly and maybe resolution-focused that Oversight Board will be?

With regard to the results of the elections and the implications that you're talking about, we do think it's possible that puts more focus on the three vacant positions, and the current administration has the ability, going through the process outlined in PROMESA, to fill those three vacancies. In a sense, they could do it today.

I don't know where the different parties stand in terms of providing lists to the president, but we do think there's an increased possibility that those three positions could be filled, in a sense, before the end of the year, which we think would help move things along. That's probably the biggest highlight coming out of that.

Got it. Then just on the litigation side, understand there's a few hearings coming up here later in the month.

In terms of the case sort of looking at the net revenue debate in terms of how that gets calculated, could you just kind of summarize what you're seeing there in terms of that case developments in terms of if you feel like the sides are getting closer together, further apart? There's a lot of stuff to track there, we just want to understand your sort of take on that case specifically.

Thanks.

Tommy, without going into all the details, and obviously people have read all the court filings, there clearly is a difference of opinion with regard to what the board thinks and what the bondholders think. Again, collectively, as one of the bondholders, we feel we have a very strong case on that one.

I don't know that there's really any movement in terms of the sides getting closer together, as that part of the question, but again, I think we feel pretty good. Hard to know with litigation what the final outcome will be, but hopefully we will know soon.

Thanks.

Good morning, guys.

Good morning.

First question is just why have you not yet sold the custodial receipts you created in July? Last year's sold pretty fast, and it looks like prices have held up, just curious why you're holding on to these receipts longer than last year's batch.

Patrick, we continue to look at the market and look at opportunities, as I think you're aware. It's not a really deep and liquid market.

We're, I think, pretty aware of what the possibilities are, and we want to make sure that it's beneficial to shareholders. We'll continue to look at that.

As some of these court decisions could impact the price, up or down. There could be other events, but we're looking at that all the time.

That's good. Then a few years ago, you publicly announced and ran the sale process, and since then you've mostly or substantially resolved a lot of the gating issues, it seemed, that prevented the sale then.

The question is, are you running a sale process now? If not, why aren't you, given the kind of rapid burn of shareowner value from kind of ongoing operational costs?

I think you summarized it correctly. We believe that a transaction would be beneficial to shareholders.

We set out to do that several years ago, everything that you just described. As I've mentioned in previous calls, I think the feedback from that process was really twofold.

One was reduce your PREPA exposure, or eliminate it. Two was to get dividends from National up to the holding company.

We clearly did the second one and provided the actual shareholder dividend three years ago. We reduced our PREPA exposure significantly.

From the time we started this, it's down by two-thirds, as you referenced all the custodial receipts to deal with another $35 million. While we've not started a formal process, I think people know that we are in runoff, and based on the sale process from a few years ago, we would obviously look to sell the company, sell National, do whatever it is that's beneficial to shareholders as soon as possible.

That's good. Thank you.

Thank you.

Oh, hi. Good afternoon from London.

Hope all well. My first question is the usual question, but this time with a twist.

The $71 million buyback authorization that you have in the books, is it correct that you can still use it as we discussed before, that you can use it if you would like to and that there are no legal or regulatory constraints in order to use it? Could it be used for dividends?

With regard to the $71 million authorization, and I will apologize, Carlos, you broke up there for a little bit. The $71 million authorization is valid.

We have the ability to use that. That applies to both the holding company and to National.

There are no regulatory constraints on that. It's not the same as dividends.

Dividends are something that the company looks at on a regular basis, and the board can approve at any point in time. There's not an authorization ahead of time, and so therefore the $71 million does not apply to that.

MBIA Inc., the holding company, could pay a dividend, in theory, without having to go to the regulator?

That's correct.

Perfect, thank you. Please, go ahead.

No, go ahead.

No, you can go ahead, please.

No, there is no regulatory oversight in terms of DFS with regard to the holding company. The holding company has the ability to declare and pay dividends.

Exactly. It would be just liquidity constraint rather than a regulatory constraint.

Perfect, thank you. That's very helpful.

The other question that I have is that I sent you a letter with my understanding and the rationale for using the buyback capacity of $71 million, and that's basically it was a proposal that was also supported by other shareholders. Could you please explain why this has not been done, and what is the rationale for not using this capacity at this stage?

With regard to dividends, I think as most people know, if you go back to about the time PREPA entered Title III, which is a little over nine years ago, we've repurchased over 80 million shares during that period at an average price of $7.74. That's not necessarily equivalent to today's share price because in addition to those share repurchases, we had the special dividend three years ago, which was $8 a share, which is a little bit over $400 million in total.

During the time that PREPA has been in Title III, we've returned over a billion dollars to shareholders through share buybacks and through dividends. We think, given that we're in runoff, it's very important to distribute money to the shareholders via both of those approaches.

We continue to look at those, and with regard to the current situation in your question about repurchases of shares, as I think most of the people know, most of those share repurchases have been done through National. There has not been any capacity at National for the last couple years.

That could change based on the stock price at any given time and our financial results. Therefore over the last couple years, the dividends would have to come from the holding company.

There, again, as we've articulated in the past, we look at several things in terms of the use of the liquidity at the holding company. That could be shareholder dividends, it could be debt repurchases.

We obviously have obligations, primarily the Inc. debt and the MTNs at the holding company, not only in the next couple of years, meaning '27 and '28, but we also have maturities beyond that.

We take all those things into account and make decisions that we think are best for the company.

What is the specific reason not to use And I understand that National is constrained, but the holding company is not constrained, and you could use the 71 million $71 million buyback authorization. What is the exact reason why you are not doing that?

The $71 million is not a specific amount of money. It's just an authorization.

The money would come from the holding company and the liquidity. As I just mentioned, we look at several things in terms of utilizing that liquidity.

We obviously have all the obligations I mentioned, but we look at debt and stock repurchases at any point in time. If we think it makes sense, then we'll do it.

Perfect. We have a meeting later this month, we can discuss further there.

The other question that I have is that the sales process, I know that it is not necessarily active at the moment, but that you would listen to offers as you just discussed with representative of Kahn Brothers. What is the starting price for this selling process?

If someone would come or I would come tomorrow and I would offer you $300 million knowing that the market cap at the moment is $225 million, would you accept it or is it something that you consider? What is your starting price for the selling process?

I don't think it's appropriate for us to discuss price of particular transactions on this call. If for some reason you are interested in making a bid for the company, you should contact us after the call.

I also want to clarify you have a call with Greg Diamond, the head of our Investor and Media Relations, next week, not with anybody else at the company.

Yes, I will be discussing this issue. Now we go to the coop.

In the coop, MBIA Inc. is not bound by the terms of the coop, it is only National.

I've been reviewing the coop, and MBIA Inc. would be free to act without being constrained by the terms of the coop.

Is that correct?

I think it depends on what type of actions you're talking about.

MBIA Inc. is not a party to the coop, and there is no definition of affiliates, the coop is only binding on National.

Carlos, do you have a specific question?

Could you please confirm that MBIA Inc. is not a party to the coop?

Let's hypothetically say I agree that it's not. What's the follow-up question?

Yeah. No, well, basically MBIA Inc.

would be free to contact the Oversight Board with a proposal and negotiate directly if you wanted.

I'm sorry, I didn't understand that.

MBIA Inc. would be able to contact Oversight Board, for example, and make a counterproposal if MBIA Inc.

wanted. That's basically my question.

The PREPA claims are held at National. Any proposal would come from National.

Making a distinction in this case between National and Inc. is irrelevant in our view.

I respectfully disagree. Coming also to the offer that Oversight Board made of approximately 40%, you mentioned last time, 30% to 40%, has any counteroffer been made by the coop?

We can't talk about the confidential negotiations that may or may not be going on between the creditors and the Oversight Board.

Yeah. In my opinion, and this is only my opinion, I think that making a counteroffer of 60% would be beneficial for MBIA shareholders.

That's something that I will be discussing during our meetings later this month. Then also one question that I have about the coop is that unfortunately, our lawyers are going to be dissolved, Weil Gotshal.

My question is what is the process now that our lawyers are going to be dissolved, and are we going to be trying to find lawyers that are a little bit more effective? Because the strategy didn't work over the last few years.

What is the process for replacement?

Given the announcement and the process going on at Weil Gotshal, we are currently represented and have adequate or appropriate representation. We're very comfortable with the representation and advice that Weil has provided.

We're in conversations with the lawyers there in terms of next steps, and we are comfortable that we will have legal representation without any disruption during this process.

Perfect. Would you consider a different law firm if we suggest a different law firm that has a different strategy?

Is this something that you are willing to listen to?

At this point, almost by definition, we're going to end up with a different law firm at some point given that Weil is winding down. Stay tuned, and we'll let you know how that plays out.

Perfect. I will be proactive, and I will be suggesting something also during our conversation this week.

Then also another question that I have is, what are the costs of being a member of the coop annually? Do you have any idea of how much this is costing in terms of your legal costs?

Also, I can imagine that there are some common costs with the other members of the coop. What is the cost of having the coop running?

In our view, there is no incremental cost to being a member of the coop group.

No, but you are paying fees. There should be some kind of figure.

Of course you will have to compare it to the cost of running it alone, but what is the cost of being a member of the coop?

There are no fees to be a member of the coop group.

You have to pay lawyers, and the lawyers have to participate in the coop. I assume that you have some understanding of what is it costing to be in the coop.

Why don't you follow up with Greg on that because maybe we're not understanding. In our view, actually, it probably reduces expenses given that some of the things are shared by different parties.

There is no incremental cost, in our view.

Okay. Finally, the coop is now set to end at the end of August 2027.

What is the plan in terms of extending it?

It's early at this point, there's no sort of plan at this point in terms of what might happen come August.

Yes, and would you consider extending it only if any of the members of the coop would decide to buy our claims?

I think those are two separate things. We can sell our claims if we get an attractive offer.

Again, in terms of extending it, we think there's great benefit to the coop group at this point. Again, August is a ways off, we have plenty of time to make decisions there, but we think there's a great benefit to the coop.

Yeah. Have you approached any of the members of the coop in order to make any offer or to see whether they are interested in buying our claims?

Again, that's not something that we would discuss. Those would be confidential discussions and back-and-forth, not anything I can comment on at this time.

Perfect. Thank you for your time, and let's continue discussing later in the month, first with Greg, and probably then in a different way.

Perfect. Thank you so much.

Thank you for your time.

Thank you.

Thank you. Bill, I have a couple questions.

I'm not current on it, but at one time, I was aware there was an incentive plan in place that paid bonuses, to speak, upon exit to yourself and a couple of other executives. Is that plan still in place?

There is a plan that takes effect on a change of control, sale of a company. At this point, I am the only one left who is covered by that.

There were many other executives at one point who have all left the firm.

Okay. As they've left the firm, the incentive payment to you is still in place, and as I recall, was reasonably substantial.

Yes, it's all in the proxy, and that's why I know you have the information. Yes.

Yes, but it's still in place. Okay.

Do you have any direct or indirect exposure to this commuter railroad in Florida, this Brightline?

I can happily say no. We have no exposure whatsoever.

All right. That leads me to a question.

Assured Guaranty is deeply involved in that, and as I understand it from a very, very high level, they did a bankruptcy reconstruction in which they excluded the municipal part, but I think there had to be additional investments made. It's certainly an impaired credit or at least one that has potential problems for Assured, which suggests that for them to keep their rating, there's indications they may be looking to increase their capital.

I remember some time ago when I had a discussion with you about Assured Guaranty acquiring MBIA, I said, "Well, maybe because all the positions merge, and they're already insuring most everything and they get a big benefit." You said, "No, the real benefit's the capital."

It seems to me that if Assured Guaranty is looking to enhance its capital, whether it's because of Brightline or some other credit issues, they would be more incentive than normal to try to get something done with you guys. I wondered if you had any reaction to that thought.

I think you've summarized the situation that Assured faces with regard to Brightline, which as you mentioned is a railroad down in Florida. Again, they would be the experts on that particular situation.

We are aware of it. In terms of whether that makes a combination between MBIA and Assured more or less likely, similar things, I can't really comment on that at this point in time.

All right. The other thing that has happened is that and he was on the call earlier, that the Kahn Brothers have come back into ownership.

Between Kahn Brothers and I think it's Levin, who's a private investor, they combined have over 15% ownership. I wonder if you're getting any suggestions from them as shareholders to try to accelerate this wrap-up, even though I recognize from your earlier comments there seem to be a number of very significant legal decisions and court decisions that are going to be occurring over the near term.

Are you getting any encouragement from your larger shareholders to get this thing wrapped up?

I won't comment on any discussions we have with specific shareholders, but as we speak to shareholders on a regular basis. Greg, in particular, speaks to many of them, but I've had conversations with many of our investors as well.

I think the group that is most focused on wrapping this up, as you suggest, is actually the company or management. Again, as was referenced by one of the earlier callers, we started a process at this point almost four years ago, I guess it was, and everything we've been doing is trying to accelerate and come up with some transaction that would benefit shareholders.

We think we're making progress towards that. We'd all like it to be as fast as possible.

I think the litigation has sort of delayed the timeline from what we originally set out, but we're doing everything we can to make that happen.

Thank you very much, Bill.

Thanks, John.

Morning, guys. Thanks for taking my call.

Morning.

I've got just a couple sort of housekeeping questions, I guess. First one is the investment agreement principal balance was down pretty substantially, about $57 million.

I know that there were maturities there. It sort of lines up with what the maturities were, but I just kind of wanted to ask, were those voluntary prepayments or were those just scheduled maturity payments?

Those were scheduled maturity payments.

Great. My other one is on Elcor Alexandria.

The gross par insured is dropping on a consistent basis each quarter, $11 million or $12 million. Is that National making claims payments on those, or is the issuer paying amortization payments, which is reducing your exposure?

National is making regular claim payments on Elcor.

Obviously that's because Elcor is not making those. My reading of that one is that credit seems to be in pretty good shape, especially with some meaningful positive things happening this year with release of one of those buildings.

Can you provide any sort of color, I guess, on that credit, and why National's making those and not the issuer itself?

On that, Paul, just to be clear, Elcor is making partial payments, they are paying some of the debt service. They're just not paying 100% of it.

National then pays the difference. Everything you described is correct.

There is what we think is positive activity with regard to that credit. You mentioned the additional building being leased, we do think despite what happened over the last couple years, it is moving in a very positive direction.

I don't want to really belabor that one because I don't worry about it too much. Do you know or can you, I guess, give us your opinion?

Do you think they'll sell those buildings or how do you think that will get settled there?

I think at this point, it's hard and it would just be speculation. Again, I think because of the sort of underlying economic conditions right now with regard to that building, we're pretty optimistic about it.

Yep, agreed. Last question for me really is, I saw some headlines on the US Virgin Islands issuing new gross tax receipts debt, and it said they were going to issue $500 million and the use of proceeds would be for repaying other gross receipts debt and other general corporate purposes.

Can you tell us are the proceeds of that new issuance, is that happening? Is that to repay our National-wrapped debt or is it just kind of coming in pari passu with us?

It's pretty much the latter, it will not be repaying our debt to the best of our knowledge.

Got it. Okay.

One more comment for me while I have you is I would sort of respectfully disagree a little bit with Carlos before on the share repurchases. Just I agree with you really in that I actually think it would be better for shareholders to focus on the debt, particularly the ones that you can buy at a large discount.

I think you can kind of create similar book value expansion with some of those medium-term notes. Also obviously, which I know you're focused on, probably reducing the negative carry associated with the cash and your Inc.

debt as well. That's not a question, just a comment that I wanted to add.

Thanks for your time.

Nope, thank you.

Hi, good morning. Thank you for taking my call.

Morning.

A couple of facts I just wanted to confirm before my first question, just to clarify. The first thing, MBIA Inc.'

s reported operating expenses are running roughly $65-plus million a year, going on three straight years, $69 million in '24, $68 million in '25, and through last night's reporting, about $48 million through the first three quarters of '26. That would be one thing I just wanted to confirm.

Then second, the coop's term has now been extended five times since National joined, now with the next extension running through August 31st and a possible extension after that through November '27. It doesn't look like there's really any kind of committed end date there.

Is that a fair wrap-up of those facts there?

The operating expenses are as reported. As we've stated, I think, already in the discussion today, the agreement goes through August.

To your point, it's been extended in the past. I can't comment whether or not it will be at that point among all the bondholders, but it's always a possibility.

Great. Okay.

Thanks. With those $65 million, plus or minus, in expenses being reported and the outcome pending on the coop side, I'd just like to know, does the board have an internal threshold, some type of dollar amount or date beyond which it would pivot from the coop to look at other options of private transfer, sale, or settlement?

If there isn't one, if there isn't some type of threshold there, how does the board distinguish between this patience and your desire to see this out versus funding the sunk cost on continuing? I understand, too, that it's National and it's just PREPA-related.

How do you distinguish between that patience and just running the cost out?

With regard to the coop or the PREPA situation, first of all, there's nothing in the coop agreement that prevents us from selling our claims. We've sold many in the past.

As I mentioned earlier on the call, we had $1.2 billion of exposure when PREPA filed Title III back in 2017. We've reduced that by approximately two-thirds.

As we sold custodial receipts last year. We do have other custodial receipts right now, which if we had what we thought was an appropriate price, we could sell those.

The remaining $390 million, which is insured par, is a little bit more difficult to get rid of, but if there was an attractive price at which to do it, we can do that irrespective of the coop agreement. Again, that's not preventing us from winding down our PREPA exposure.

With regard to operating expenses, the only other thing I would say is I think for shareholders, the way I think most of the shareholders look at it is some of those expenses are associated with MBIA Inc. The ones that really affect the shareholders are the operating expenses at the holding company and at National.

Right. Okay.

Really there is not a threshold that's being looked at? Yes?

When you say threshold, we're trying to reduce our exposure as quickly as we can, again, but it's got to be at attractive prices.

Okay.

I'm not sure when you say threshold what you're looking for.

Just wondering if, overall, if it ends up being four years, if there's an extension in August and an extension in November, that potential for remaining in the coop then could look out for a total of four years that National's in that, and National not necessarily being the party that's unilaterally controlling everything there, it's largely the bondholders. Just wondering, I guess following up on that then, just looking down the road, with the expenses and the runoff, the company being in the runoff, just trying to figure out if there's any kind of deadline or a point in time where the board or management has said we're ready to pivot if we get to X, Y, or Z.

Again, the coop agreements are irrelevant, I think, for what you're talking about. The question is can we reduce our PREPA exposure at attractive prices, or does the PREPA exposure somehow prevent an attractive sale or transaction related to the company?

Again, I think the timeline is driven more by the litigation schedule. I take your point that perhaps, implicitly, the bondholders could impact the litigation schedule, but for the most part, that's driven by the judges and the courts.

Again, we continue to look for ways to reduce our exposure, and we've never felt that the coop agreement constrains us. We've been frustrated by the pace of litigation through the court system.

Right. Sure.

Okay. One other question, if you don't mind.

On the second-quarter call, I believe you characterized the Oversight Board's proposal as roughly $0.30 to $0.40 on the dollar against PREPA bonds trading around maybe $0.75. Looking at National's own disclosed loss and LAE reserves against $508 million of insured debt service, that implies an expected recovery somewhere in the mid-50s.

That's implied. Which would be well above the rejected offer in that $0.30 to $0.40 range.

Did the coop counter an offer anywhere near that reserve-implied level, or did the coop counter at all?

Again, I can't comment on the negotiations. Those are all confidential in terms of any offers or counteroffers unless or until they're made public.

That cannot be disclosed. Okay.

I think final question, if you don't mind. In August '25, National sold $374 million of the custodial receipts.

The price you described as higher than your prior estimate, but that was not disclosed. What did National realize as a percentage of face?

Is that something you can disclose?

Ask the question again, Neil. I didn't catch the last part.

As a percentage of what?

As a percentage of the face value.

We didn't and don't disclose that.

That won't be disclosed. Thanks.

Thank you.

All right, that was it for me. Thank you.

Thank you.

Thank you, Leslie, and thanks to those of you listening to our call. Please contact me directly if you have any additional questions.

We also recommend that you visit our website at mbia.com for additional information on our company. Thank you for your interest in MBIA.

Good day, and goodbye.