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 website, 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 this 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 reported in 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 was included in last week's press announcement and in the financial results report that was posted 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. 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 settlement with Credit Suisse and the revised plan support agreement, or PSA, for the Puerto Rico GO debt.

The RMBS put-back settlement with Credit Suisse came after more than 11 years of litigation, and resulted in Credit Suisse paying MBIA Insurance Corp. $600 million. Regarding new PSA for Puerto Rico, National was a signing party to this new agreement that was announced last week.

While both of these developments occurred in 2021, they were both reflected on our fourth quarter and full-year 2020 financial results. For the Credit Suisse settlement, the $600 million recovery was reflected in the relevant MBIA Insurance Corp. accounts.

For the Puerto Rico PSA, its economics were reflected within the cash flow scenarios and probability weightings that we use to calculate National's 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. MBIA 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 MBIA Insurance Corp. has an impact on MBIA 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 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% bondholders 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 31, 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 resolution to the debt obligations of the Puerto Rico Highway and Transportation Authority, or HTA.

Regarding National's litigation against certain underwriters of some of its insured Puerto Rico debt, we await a resolution of the defendants' motion to dismiss the case, which was fully briefed as of November 30, 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 21:1.

During 2020, National acquired 26.4 million shares of MBIA's common stock at an average price of $7.50 per share. As of February 22, 2021, MBIA had 53.7 million shares outstanding. Since the end of 2016, the company has repurchased 86 million shares of MBIA common stock, which we believe has contributed substantial value to MBIA Inc. shareholders.

Now, Anthony will cover the financial results. .

Thanks, Bill. And good morning. I will begin with a review of our fourth quarter and fiscal year end 2020 GAAP and non-GAAP results.

The company reported a consolidated GAAP net loss of $81 million or a negative $1.64 per share for the fourth quarter ended December 31, 2020 compared to a consolidated GAAP net loss of $243 million or negative $3.21 per share for the fourth quarter ended December 31, 2019. The lower this quarter was driven by several factors.

Higher VIE income in Q4 2020, primarily due to an increase in our RMBS put-back recoveries reflecting the settlement with Credit Suisse; lower loss and loss adjustment expense at National; lower impairments on investments; and lower consolidated VIE expense as several VIEs were deconsolidated in 2020, due to the repayment of insured debt by the issuer and the related elimination of our insurance coverage.

These items were somewhat offset by foreign exchange losses on financial instruments and lower net investment income due to lower invested assets at National. Loss in LAE incurred at National this quarter was primarily due to the increase in risk free rates used to discount Puerto Rico assuming losses and recoveries.

There were no material changes to our loss scenarios. As Bill stated earlier, results of the analysis related to the GO PSA National conditionally entered into fell within our current estimates of GO loss reserves and recoveries. Loss and loss adjustment expense this quarter at MBIA Corp.

was higher than the prior comparable quarter, primarily due to a reduction in estimated recoveries on claims paid on the Zohar CDOs.

The company's adjusted net loss, a non-GAAP measure, was $36 million, or negative $0.74 per diluted share for the fourth quarter of 2020, compared with an adjusted net loss of $95 million or a negative $1.25 per diluted share for the fourth quarter of 2019.

The favorable change was primarily due to lower loss and LAE at National and a consolidated VIE loss in Q4 2019 related to the since deconsolidated COFINA exposure, somewhat offset by lower earned premiums and net investment income for National. Now on to the full year 2020 results.

The company reported a consolidated GAAP net loss of $578 million or negative $9.78 per share for the fiscal year ended December 31, 2020 compared to a consolidated GAAP net loss of $359 million or negative $4.43 per share for the fiscal year ended December 31, 2019.

The higher net loss year-over-year was driven by greater loss in LAE at MBIA Corp., due primarily to decreased expected recoveries related to the Zohar CDOs and at National related to certain of its Puerto Rico exposures, with HTA driving the increase. GAAP discount rates reduced year-over-year, resulting in a partial benefit.

Total revenues of $282 million in 2020 were comparable with the prior year, although the composition of revenues changed. There were higher consolidated VIE revenues in 2020 due to increases in RMBS put-back recoveries and gains from deconsolidation of VIEs versus losses in 2019.

In addition, in 2019, we recognized losses on an impaired security held at National that was sold in early 2020. These revenue increases were offset by lower gains on investments at National and lower net investment income and earned premiums in 2020.

The company's adjusted net loss for the year ended December 31, 2020 was $173 million, or a negative $2.93 per diluted share compared with an adjusted net loss of $17 million or negative $0.21 per diluted share for the year ended December 31, 2019.

The unfavorable change was primarily due to higher loss and LAE at National and lower earned premiums and net investment income, somewhat offset by lower interest and operating expenses.

Book value per share decreased to $2.55 per share as of December 31, 2020 compared to $10.40 per share as of December 31, 2019, primarily due to the 2020 net loss of $578 million and nearly $200 million spent for MBIA Inc.

share repurchases, partially offset by unrealized gains on investments and 26 million fewer net shares outstanding due to the share repurchases during the year. We believe that the impact on book value resulting from cumulative share repurchases should ultimately improve shareholder value.

In addition, the negative GAAP book value of MBIA Insurance Corp., which includes accrued but unpaid interest on its surplus notes, has materially contributed to the decline in consolidated book value. MBIA's management believes MBIA Corp.

does not have significant economic impact on MBIA Inc's shareholder value, which is why it is one of the book value adjustments implemented by management. In the event, consolidated book value could become negative in the future primarily due to MBIA Corp.'s negative contribution, it does not reflect any solvency issues for MBIA Inc.

and it's also why, in many ways, statutory filings are more accurate portrayal of economic value at the operating companies. I will now spend a few minutes on the corporate segment balance sheet and the insurance companies.

The corporate segment, which primarily includes the activity of the holding company, MBIA Inc., had total assets of $954 million as of December 31, 2020. Within this total are the following material items. Unencumbered cash and liquid assets held by MBIA Inc. totaled $294 million as of December 31, 2020 versus $375 million as of December 31, 2019.

The decrease was primarily due to calling the remaining $115 million of MBIA Inc. 6.4% notes due in August 2022 at par, partially offset by the receipt of the as-of-right dividend from National of $81 million.

There were approximately $500 million of assets at market value pledged to the GICs and the interest rate swaps supporting the legacy GIC operation.

As of December 31, 2020, there were $12 million of tax deposits made by National under our tax sharing agreement that had not yet been refunded to National or released to MBIA Inc., and which represented the remaining portion of National's 2018 tax deposits.

As we have stated in recent prior quarters, tax escrow releases are not expected to be a meaningful contributor to holding company liquidity in the future.

Turning to the insurance company's statutory results, National reported statutory net income of $41 million for the quarter-end December 31, 2020 versus net income of $4 million for the quarter ended December 31, 2019.

The favorable result was due to lower loss and LAE, mostly as a result of lower statutory discount rates, partially offset by higher taxes. For the year ended December 31, 2020, National reported a statutory net loss of $82 million versus net income of $39 million for the year ended December 31, 2019.

The unfavorable result was due to lower capital gains, as in 2019 National benefited from the sale of its PREPA and COFINA bonds, as well as lower earned premiums and investment income, somewhat offset by lower loss and LAE. As of December 31, 2020, National has paid $1.6 billion in inception-to-date gross claims on its insured Puerto Rico bonds.

As of December 31, 2020, National's total fixed income investment portfolio, including cash and cash equivalents, had a book-adjusted carrying value of $2 billion. Statutory capital was $2 billion, impacted from year-end 2019 by its purchases of MBIA Inc. shares and its year-to-date net loss. Claims paying resources totaled $3.1 billion.

Insured gross par outstanding reduced by $2 billion during the quarter and now stands at $41.9 billion. Turning to MBIA Insurance Corp., the statutory net loss was $54 million for the fourth quarter of 2020 compared to a statutory net loss of $73 million for the fourth quarter of 2019.

The favorable result was due to higher premium revenue and lower loss and LAEE, partially offset by higher foreign exchange losses. For the year ended December 31, 2020, MBIA Insurance Corp. reported a statutory net loss of $202 million compared to a statutory net loss of $141 million for the year ended December 31, 2019.

The unfavorable result was due to higher loss and LAE, driven by a decrease in expected recoveries on the Zohar CDOs. As of December 31, 2020, the statutory capital of MBIA Insurance Corp. was $273 million versus $476 million as of December 31, 2019.

Claims paying resources totaled $992 million and cash and liquid assets of $130 million have remained relatively consistent throughout the year. As Bill mentioned, due to the settlement with Credit Suisse, MBIA Corp. received a payment of $600 million in February 2021.

The settlement amount was reflected in MBIA Corp.'s 2020 year-end as an adjustment to salvage reserves on claims paid and statutory capital. MBIA Corp.'s insured gross par outstanding was $7.7 billion as of December 31, 2020 due to some large paydowns in Q4.

With Credit Suisse behind it, MBIA Corp.'s largest remaining legacy remediation and projected recoveries related to the Zohar CDOs. And now, we will turn the call over to the operator to begin the question-and-answer session..

[Operator Instructions]. Our first question comes from the line of Tommy McJoynt of KBW..

Could you guys provide some details on kind of what you mean by the conditions that need to be met for you to continue your support of the planned support agreement? And in your view, is it possible for the GO and this PBA deal to go through without resolution of HTA as well?.

You focused on the right issue, which is, the attention now is turning to HTA. Whether or not it needs to be a complete agreement or whether certain issues may be addressed prior to March 31 remains to be seen. But that is the focus. And that's what the priority is at this point..

Could you discuss where we kind of stand in terms of progress toward HTA resolution? Is it kind of underway or is it really just kind of just getting started?.

Unfortunately, everything around that is confidential. So, there's not much I can comment on at this point. But given that there was agreement and that there is a date of March 31, it's reasonable to assume the parties are now focused on it..

Separately, you noted that you raised the risk-free discount rates, which had the negative impact on expected recoveries? Was that based on year-end rates when the 10-year was closer to 1%? Or does it reflect the more recent rise in rates, particularly in February? What I'm getting at is just seeing if there really needs to be another mark-to-market..

It was year-end, Tommy. We based the discount rates on the results as of the end of the year..

At the end of the first quarter, given the recent rise of rates, we expect to see another similar mark?.

Depending on where we are at the end of the quarter, we'll adjust the rates accordingly at that time. And if they're higher, then, all things being equal, we'd probably have an impact on the recoveries..

Lastly, can you just walk through kind of where the three upstream sources of capital to the holdco from National are? And that's just meaning the tax escrow release. I think you had said that's pretty much zero. And then there's the as-of-right dividend, which were think around $80 million and then there's potentially special dividends.

Can you just kind of make sure we're kind of up to date on what those should look like going forward?.

Let's start with the as-of-right dividend. So, the as-of-right dividend for 2020 was about $81 million. We would expect given National's investment base that the as-of-right next November would be probably somewhere in the realm of $60 million at this point.

And then future as-of-rights will depend on just the level of National's managed assets and investment yields going forward. The tax escrow, as we said, it's down to $12 million at the end of the year.

Going forward, having settled remaining tax items, in 2021, just to use the example, if national makes money, it will contribute additional deposits to the tax escrow. That would be, all things being equal, paid out two years later to the holding company depending on National's performance.

If National loses money in 2021, it'll have an NOL of its own that it creates. But all in, again, I would not expect tax escrow releases to be material contributor. And then special dividends, again, at some point, as I think we've said before, when Puerto Rico is more settled and understood, we would potentially look for a special dividend from Inc.

to National. In the meantime, when you look at MBIA Inc., as you know, we've been bolstering the cash position and liquidity profile of Inc. the last several years. We repaid the remainder of Inc.'s 2022 debentures in the fourth quarter.

So, with our cash position today, and there's not a substantial amount of debt coming due the next few years, we're really looking more toward the 2024/2025 timeframe when you just consider as-of-right dividends and normal investment income at Inc. So, we're well positioned for the next few years of the holding company..

Our next question comes from Vadim Perelman of Foundation Partners..

I wanted to ask a big picture question. So, looking at the past few years, you've executed on a capital allocation strategy that, frankly, makes Henry Singleton and The Outsiders look timid. Since 2017, you've grown true economic value by 68% to $42 a share now almost, and yet the stock still trades at like a sixth of liquidation value, basically.

This could be the most mispriced security in the stock market. I do a math and you guys have something like $1 billion of excess capital at National that you could distribute post Puerto Rico, which is 2.5 times today's market cap. What am I missing here? Stock could be up 3 – can still be trading at half of liquidation value.

Oscar Wilde's famous last words were, either the wallpaper goes or I do. And this feels like the same. Like either valuation is crazy or I am..

There's really not much I can say, right? You described some of the financial metrics accurately. As you know, we've repurchased a substantial amount of stock in roughly the last five years. I think it's over 60%. I mentioned 86 million shares. So, we don't comment, per se, on the stock price relative to some of the metrics.

So, I'm not sure I can add much more to the commentary that you just laid out..

A follow-up to that, going forward, if you bought back an incremental 20 million shares even at $12, which I think you have the capacity for at National, I get to an adjusted book value or liquidation value, true intrinsic value of $59 bucks a share. And again, the stock is at, whatever, $7, $8.

So, I'm just trying to figure out, this is third grade math, it's not differential equations. But, Bill, you own 2.4 million shares, I think. So, $60 bucks, it's $160 million of net worth, personally, which is pretty good.

How do we get there? Like, how do you think about that? For shareholders, for yourself, how are you thinking about the situation? Incredibly valuable security in the equity..

As you know, the key issue for the shareholders is Puerto Rico at this point. And everyone is aware of that. It's obviously a complex situation. There was, I think, quite a bit of attention last week with the PSA.

And the fact that at least the parties involved, the words recently seemed to generate more urgency or indicate more urgency around trying to resolve Puerto Rico. Now, the key is whether the actions follow the words.

And then following up on some of the metrics that you have mentioned, the issue, I think, for shareholders is being able to move money from National to the holding company as the exposure that is the insured portfolio reduces and as the exposures reduce. So, that's how it works. And that's where the focus is.

And as I've said for quite a while, the emphasis is on Puerto Rico right now because that's the key to freeing the cash up and reducing the sort of distressed exposures at National and then being able to move money up to the holding company. So, again, that's where the emphasis is..

You guys have done an extraordinary job, actually growing intrinsic value per share, even with Puerto Rico, even with not writing new businesses. It's, frankly, extraordinary. So, anyway, very excited to be partnering with you here..

Next question comes from the line of Alan Weinstein [ph] of Elliott Investment. .

It's a similar question to the gentleman prior. I've been a long-term shareholder, Bill, and grew up in the municipal bond business. And I guess my question has to do with enhancing long-term shareholder value.

What is your plan post Puerto Rico to enhance shareholder value since we're not writing new insurance? What does the business look like two to three years down the road? And how do we make the stock perform the way we all think it should?.

In terms of what things look like at this point in time, after Puerto Rico, generically, there are a couple of things people could do. We as a company have looked at lots of different alternatives. I am aware of obviously other runoff companies that have looked to diversify, get into other businesses. We've looked at lots of things.

We've concluded that the best thing for shareholders, given the situation, is to run off the portfolio – that is the insured portfolio – and get as much of the cash up to the holding company and available to the shareholders. That's how we think we can enhance shareholder value at this point in time.

And therefore, to your question, the real issue is one of being able to do that in large quantities, obviously, the amount of dollars coming from national, and the speed at which we can do it. And again, similar to the last caller, that all focus is on Puerto Rico.

So, once we're able to do that, to the extent there are things that we can do to eliminate other exposures, sometimes you see refundings that have taken place in the portfolio. Many of those are not within our control. It's as municipalities refinance their exposure. But that's how I think we can increase shareholder value.

And again, that will continue to be the focus. So, again, it's Puerto Rico, and then it's getting the cash up to the holding company where we think we can really make it clear and transparent that there is value for the shareholders. .

Our next question comes from the line of Paul Saunders of Hutch Capital. .

I have a couple questions just on MBIA Corp. Congrats, by the way, on the Credit Suisse settlement.

So, on that item, specifically, can you provide any color on what you plan to do with the $600 million of capital there are corp.?.

Given that we have the money in the door right now, the good news is corp.'s in the best liquidity position it's been in – I probably can't remember, back to post financial crisis. So, what we need to look at now is the following.

One is, how do we position the funds from an investment portfolio standpoint to optimize returns and cover future policyholder claims.

Number two, to the degree that we may consider repaying some of or all of MZ Funding facility, we need to look at the balance between the investment portfolio strategy and possibly paying that down with some Credit Suisse funds. That's subject to New York Department of Financial Services approval.

But at that point, again, it really becomes more of a normalized situation for Corp. where claims paying resources have primarily been in the form of recoveries the last many years.

And now we're in a position where we actually have some of those recoveries monetized and it's really getting the investment portfolio right-sized to handle future claims..

Just as a follow up to that, if you don't mind as it relates to Zohar and MZ Funding, can you provide kind of any color on what monetizing that portfolio looks like and timing? And then just as your discussions with the New York regulator goes, how do they think about that in terms of – even if, say, Zohar is zero, I know it's not, but would they still allow Corp.

resources to be used to pay that debt there at MZ Funding?.

Let go to your first part of the question. We are in the midst of a Chapter 11 bankruptcy process in the State of Delaware related to the Zohar and everything specifically to portfolio companies is confidential. But there are court orders in place related to the sales of portfolio companies. We're in the midst of that process now.

So, I would say our hope is that over the next year, we make some meaningful progress in monetizing some of those portfolio companies and getting some funds in the door to repay MZ Funding. As far as – I'm not going to speak for the department.

But, obviously, what we need to speak with them about is the adequacy of overall claims paying resources and the benefit to policyholders of potentially paying down some of MZ. So, it's really an optionality question at this point because MZ doesn't mature until January of 2022. But that's what we'll be looking at over the next couple of months..

Our next question comes from Giuliano Bologna of Compass Point..

Shifting back to a topic that's obviously different times, obviously resolving the GOs would be a positive and Puerto Rico. And fortunately, or unfortunately, you paid out a lot of claims on GO. So, there's potential for some recoveries there. But then when we look at the other exposures, PREPA seems like it's moving along.

At least there's a document in place. Execution is obviously a potential risk there. If you then were to resolve the Highway & Transportation exposures, that effectively mostly resolves your Puerto Rico risk.

Would that be sufficient if you resolve those buckets to request a special dividend?.

It's possible, as we said, when there's more clarity around Puerto Rico. Now, you've just outlined, Giuliano, the three remaining credits of substantial size.

So, if all those are resolved and some type of restructuring is executed on all those, we could be in position at that point to go and ask the department for a special distribution up to the holding company. So, again, I suppose we've got to get into the details of those three things, and I don't want to get ahead of ourselves.

But as those get resolved and we do have the clarity that we've been looking for, we obviously are looking to move money up to the holding company. .

From a capacity perspective, I'm trying to get a sense of what the capacity would be to buy Inc.

shares from National on a go-forward basis based on where you were at least at the fourth quarter?.

As of December 31st, Giuliano, we had about $235 million of capacity for National to buy Inc. shares. Every quarter, it's measured based on the share price at the end of the quarter. So, there's a market value fluctuation. But as of the end of December, the remaining capacity was about $235 million..

One last one that I was curious about was when we think about reserving and kind of where your reserves are positioned, do your fourth quarter reserves include the Puerto Rico announcement and the deal that was made – the announcement, does that include any of that announced transaction? At least in the fourth quarter numbers or would that flow through in the first quarter?.

It's reflected in the fourth quarter numbers, Giuliano. We analyzed estimates, the economics of the transaction fell within those bounds. So, they are reflected in the fourth quarter analysis for loss reserves and recoveries. .

[Operator Instructions]. Our next question comes from the line of Robert Mattelli, Private Investor..

I was wondering if you could elaborate a little bit on the status of negotiations on the highways and power – the Puerto Rican Highways and Power insured?.

Robert, unfortunately, there's nothing I can say at this point, given the confidential nature of those discussions. But as I mentioned, it is highlighted as a condition that us and other parties have to the GO deal announced last week. And obviously, highways is an important credit for us. And as I said, our attention is now focused there. .

Am I right in thinking that, when you say you have capacity to purchase $250 million worth of shares this year, is that available for actual purchase?.

Well, as Anthony mentioned, that number fluctuates and is measured every quarter. We do not currently have an authorization from the board, which is required to repurchase shares, but it is something that we continuously look at. And as we've done in the past, we've bought substantial shares.

And we do believe that it does add to long-term shareholder value under the right conditions, essentially meaning the price that we can buy it at. .

Going back to Highways and Power, do you have any kind of timeframe as to how long it might take for all that to get resolved?.

No, it's very hard to predict, as you can imagine. We've been involved in Puerto Rico, some things, at times, seem to move quickly. And other things have taken a long time. Witness the fact that I think the Oversight Board has been in place now for four-and-a-half years. .

Our next question comes from the line of Peter Troisi of Barclays..

Just a quick follow-up on the Credit Suisse matter.

Will there be a gain that is booked because the amount of cash that is collected? Or if the amount of cash that was collected is in excess of where the recoverable was booked?.

We actually reflected that in the fourth quarter. So, on a GAAP basis, the majority of the VIE revenue for the quarter is the increase in the VIE related to Credit Suisse loan repurchase receivable. So, that was reflected in that column. And on a stat basis, we increased the salvage recovery on Credit Suisse to reflect the $600 million settlement.

So, from an accounting standpoint, it's been reflected. It is in the form of a VIE recoverable on GAAP and salvage for stat. That will be converted to cash in the first quarter. .

Our next question comes from the line of John Staley with Staley Capital Advisers..

Bill, similar to you and your management team, I've been a long-term holder of MBIA. And a lot of my issues have been addressed in previous questions.

But I am very puzzled, with aggressive capital allocation program, buying back the number of shares that you've articulated, a lot of it was done – some of it double digits, a lot of it's done around the $9, $9.50 level. Most recently, it's $7.50.

My guess is the stock is going to be lower than that this morning if pre-market indications are because of the report.

What is it, if you have the capacity, that is keeping your directors from supporting the view of going in and buying another $50 million or $100 million since you have a $250 million capacity? What is stopping you from buying more stock at these levels?.

As we look at it, as you can imagine, there's lots of factors we assess. I think the big change is, one, we bought a lot of shares in 2020, as we've indicated.

And additionally, with the onset of the pandemic approximately a year ago, and at the time, will continue – or what appeared to be continued delays in Puerto Rico, it just created some uncertainty as to what the liquidity needs of National might be with regard to any future claim payments.

And so, we just want to take a good look at that, make sure we have enough liquidity. As people have mentioned, we've paid out over $1 billion in claims on Puerto Rico. If things are not resolved in the near term, we obviously have other payments that are scheduled that if Puerto Rico doesn't pan, we have to pay the claims.

And it was unclear I think as we went through the third and fourth quarter what impact the pandemic might have. The good news is the pandemic does not appear to be creating the stress on municipalities that people initially thought. So that is, I think, trending in a positive direction.

And as I said, we will continue to assess the liquidity of National and the ability or the decision to buy additional shares..

My question is much simpler.

As you look at your capital allocation program, and we'd go out another year or so, do you think it's going to be a mistake or we're all going to have a smile?.

A mistake to not be purchasing shares right now?.

Purchase them in the past..

As I said, we've purchased a lot. I know your question is we stopped a little while back. I'm not going to predict – and I stay away from what the stock price will be at any point in time. But again, we have been big proponents of repurchasing shares. And we continue to look at it in terms of assessing, buying additional shares..

Is the stimulus bill critical to the health of the states? Or do you think you're in good shape independent of the stimulus bill and the allocation of whatever – how many billions to the states?.

In the current proposal, there's about $350 billion for the states and cities. We think independent of that, the portfolio is performing quite well. As I said, I don't think the stress has been what people were predicting if you went back to the summer of last year.

However, if it is passed in a form that was discussed over the weekend, it would clearly be a positive for many states and cities in terms of the allocation at $350 billion, but we don't believe that, right now, we needed to see the portfolio strengthened, but it clearly would be a positive..

And did I see a negative credit comment on insured debt instrument you have on some type of a railroad, southern something or other? Recently..

I'm not sure which one you're referring to. .

You haven't had any new credit issues on your insured?.

Nothing substantial. No. .

Ladies and gentlemen, that was our final question. And I'm showing no further questions at this time. I'd like to turn the floor back over to Greg Diamond for any additional or closing remarks..

Thank you, Maria. And thanks to all of you for listening to our call today. Please contact us directly if you have any additional questions. We also recommend that you visit our website at mbia.com for additional information about our company. Thank you for your interest in MBIA. Good day and goodbye..

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may now disconnect..