MBIA Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>MBIA Inc. has filed its 2023 10-K annual report detailing its financial performance and operations.</b>

AI Summary

MBIA INC (MBI) filed a Annual Report (10-K) with the SEC on February 28, 2024. MBIA Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal business is surety insurance, SIC code 6351. MBIA Inc. is incorporated in Connecticut (CT). The filing includes references to various financial instruments and fair value measurements.

Why It Matters

For investors and stakeholders tracking MBIA INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of MBIA's financial health, risk exposures, and strategic positioning for the fiscal year 2023. Investors and stakeholders can use this report to assess the company's performance, understand its market position in surety insurance, and evaluate potential risks and opportunities.

Risk Assessment

Risk Level: medium — MBIA INC shows moderate risk based on this filing. The company operates in the surety insurance industry, which can be subject to economic downturns and regulatory changes, as indicated by the SIC code and the nature of financial instruments referenced.

Analyst Insight

Review MBIA's financial statements and risk factors in the 10-K to understand its exposure to the surety insurance market and its management of financial instruments.

Key Numbers

• 20231231 — FISCAL YEAR END (FISCAL YEAR END)
• 20240228 — FILED AS OF DATE (FILED AS OF DATE)
• 134 — PUBLIC DOCUMENT COUNT (PUBLIC DOCUMENT COUNT)
• 001-09583 — SEC FILE NUMBER (SEC FILE NUMBER)

Key Players & Entities

• MBIA INC (company) — COMPANY CONFORMED NAME
• 0000814585 (company) — CENTRAL INDEX KEY
• SURETY INSURANCE (company) — STANDARD INDUSTRIAL CLASSIFICATION
• CT (company) — STATE OF INCORPORATION
• 1 MANHATTANVILLE ROAD (company) — BUSINESS ADDRESS STREET 1
• PURCHASE (company) — BUSINESS ADDRESS CITY
• NY (company) — BUSINESS ADDRESS STATE
• 10577 (company) — BUSINESS ADDRESS ZIP

FAQ

Industry Context

MBIA Inc. operates in the surety insurance sector, providing financial guarantees for construction projects and other obligations.

Regulatory Implications

As a financial services company, MBIA Inc. is subject to regulations from the SEC and state insurance authorities.

What Investors Should Do

1. Analyze MBIA's financial statements for revenue, net income, and asset/liability details.
2. Examine the risk factors section for potential impacts on the surety insurance business.
3. Review management's discussion and analysis for insights into strategic priorities and outlook.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-28: Filing Date — Date the 10-K report was officially filed with the SEC.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (This is the primary document filed by MBIA Inc. to report its annual financial status.)

SIC

Standard Industrial Classification, a system used to classify business establishments by the type of activity in which they are engaged. (Indicates MBIA Inc.'s primary business is surety insurance (6351).)

Year-Over-Year Comparison

This is the initial filing data extracted for the 2023 10-K report.

Key Financial Figures

• $1 — 5,911 shares of Common Stock, par value $1 per share, were outstanding. Document
• $28.4 billion — d, of its existing insured portfolio of $28.4 billion gross par outstanding as of December 31
• $2.9 billion — total insured gross par outstanding was $2.9 billion. As a result of MBIA Corp.'s capital st
• $8.00 — cash dividend on MBIA's common stock of $8.00 per share. The Company maintains a stab
• $100 million — mpany and/or National to purchase up to $100 million of the Company's shares in open market
• $8.12 — shares at an average price per share of $8.12. As of December 31, 2023, the remaining
• $71 million — under this share repurchase program was $71 million. Neither MBIA Inc. nor National repurch
• $776 million — (continued) As of December 31, 2023, $776 million of unsecured debt, which includes MBIA
• $11 million — g. During 2023, the Company repurchased $11 million par value outstanding of GFL MTNs with
• $24 million — alue. During 2022, MBIA Corp. purchased $24 million principal amount of MBIA Inc. 6.625% De
• $4 million — f MBIA Inc. 6.625% Debentures due 2028, $4 million principal amount of MBIA Inc. 7.150% De
• $0.6 million — f MBIA Inc. 7.150% Debentures due 2027, $0.6 million principal amount of MBIA Inc. 7.000% De
• $30 million — es due 2025 and the Company repurchased $30 million par value outstanding of GFL MTNs. Duri
• $5 million — MTNs. During 2021, MBIA Corp. purchased $5 million principal amount of MBIA Inc. 6.625 % D
• $111 million — es due 2027 and the Company repurchased $111 million par value outstanding of GFL MTNs. On

Filing Documents

• mbi-20231231.htm (10-K) — 9076KB
• mbi-ex21.htm (EX-21) — 14KB
• mbi-ex23.htm (EX-23) — 2KB
• mbi-ex31_1.htm (EX-31.1) — 14KB
• mbi-ex31_2.htm (EX-31.2) — 14KB
• mbi-ex32_1.htm (EX-32.1) — 9KB
• mbi-ex32_2.htm (EX-32.2) — 8KB
• mbi-ex97_1.htm (EX-97.1) — 86KB
• img95725047_0.jpg (GRAPHIC) — 49KB
• 0000950170-24-022129.txt (&nbsp;) — 41549KB
• mbi-20231231.xsd (EX-101.SCH) — 3208KB
• mbi-20231231_htm.xml (XML) — 12574KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 14 Item 1B. Unresolved Staff Comments 22 Item 1C. Cybersecurity 22 Item 2.

Properties

Properties 23 Item 3.

Legal Proceedings

Legal Proceedings 23 Item 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 25 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 53 Item 8.

Financial Statements

Financial Statements 54 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 123 Item 9A.

Controls and Procedures

Controls and Procedures 123 Item 9B. Other Information 123 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 123 PART III Item 10. Directors, Executive Officers and Corporate Governance 124 Item 11.

Executive Compensation

Executive Compensation 124 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 124 Item 13. Certain Relationships and Related Transactions, and Director Independence 125 Item 14. Principal Accounting Fees and Services 125 PART IV Item 15. Exhibits, Financial Statement Schedules 126

Signatures

Signatures 130 Schedule I 131 Schedule II 132 Schedule IV 137 FORWARD-LOOKING AND CAUTIONARY STATEMENTS This annual report of MBIA Inc., together with its consolidated subsidiaries, (collectively, "MBIA", the "Company", "we", "us" or "our") 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 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. MBIA cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. We undertake no obligation to publicly correct or update any forward-looking statement if the Company later becomes aware that such result is not likely to be achieved. The following are some of the general factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company's forward-looking statements: increased credit losses or impairments on public finance obligations that National Public Finance Guarantee Corporation ("National") insures issued by state, local and territorial governments and finance authorities and other providers of public services, located in the U.S. or abroad, that are experiencing fiscal stress; the possibility that loss reserve estimates are not adequate to cover potential claims; a disruption in the cash flow from National or an inability to access the capital markets and our exposure to significant fluctuations in liquidity and asset values in the global credit markets as a resu

Business

Item 1. Business As used in this Annual Report on Form 10-K, (i) "MBIA," the "Company," "we," "our" and "us" refer to MBIA Inc., a Connecticut corporation incorporated in 1986, together with its subsidiaries, and (ii) unless otherwise indicated or the context otherwise requires, references to "MBIA Corp." are to MBIA Insurance Corporation together with MBIA Mexico S.A. de C.V. ("MBIA Mexico"). OVERVIEW The Company's operating subsidiaries are running off their insured portfolios. Today, the Company's primary objectives are ensuring that adequate liquidity exists at the holding company to satisfy all of its outstanding obligations, mitigating losses at National Public Finance Guarantee Corporation ("National") and MBIA Corp., and maximizing recoveries on paid insurance claims. We do not expect National or MBIA Corp. to write new financial guarantee policies outside of remediation related activities. MBIA's primary business has been to provide financial guarantee insurance to the United States' public finance markets through our indirect, wholly-owned subsidiary, National, whose financial guarantee insurance policies provide investors with unconditional and irrevocable guarantees of the payment of the principal, interest or other amounts owing on insured obligations when due. National ceased pursuing the writing of new financial guarantee policies in 2017, and its primary activity today is to provide ongoing surveillance, including remediation activity where warranted, of its existing insured portfolio of $28.4 billion gross par outstanding as of December 31, 2023. The Company has also provided financial guarantee insurance in the international and structured finance markets through its subsidiary MBIA Corp. As of December 31, 2023, MBIA Corp.'s total insured gross par outstanding was $2.9 billion. As a result of MBIA Corp.'s capital structure and business prospects, we do not expect its financial performance to have a material economic impact on MBIA Inc. Ref

Business (continued)

Item 1. Business (continued) As of December 31, 2023, $776 million of unsecured debt, which includes MBIA Inc.'s senior notes and medium-term notes ("MTNs") issued by its subsidiary, GFL, was outstanding. During 2023, the Company repurchased $11 million par value outstanding of GFL MTNs with maturity in 2024 issued by our corporate segment at a weighted average cost of approximately 92% of par value. During 2022, MBIA Corp. purchased $24 million principal amount of MBIA Inc. 6.625% Debentures due 2028, $4 million principal amount of MBIA Inc. 7.150% Debentures due 2027, $0.6 million principal amount of MBIA Inc. 7.000% Debentures due 2025 and the Company repurchased $30 million par value outstanding of GFL MTNs. During 2021, MBIA Corp. purchased $5 million principal amount of MBIA Inc. 6.625 % Debentures due 2028 and $ 1 million principal amount of MBIA Inc. 7.150 % Debentures due 2027 and the Company repurchased $111 million par value outstanding of GFL MTNs. On December 7, 2023, National paid a $550 million special dividend that was approved by the New York State Department of Financial Services ("NYSDFS") to its ultimate parent, MBIA Inc. Additionally, in each of the fourth quarters of 2023 and 2022, National declared and paid as-of-right dividends of $97 million and $72 million, respectively, to its ultimate parent, MBIA Inc. Also on December 7, 2023, the Company's Board of Directors declared an extraordinary cash dividend on MBIA's common stock of $8.00 per share. The dividend was paid on December 22, 2023 to shareholders of record as of the close of business on December 18, 2023. The remainder of the dividends from National are being retained by MBIA Inc. and are intended to be used for general corporate purposes including, but not limited to, future operating expenses and debt service obligations. National Risk Mitigation National's most significant risk is credit risk in its large and diverse insured portfolio of domestic public finance credits. Na

Business (continued)

Item 1. Business (continued) Our liquidity and capital forecasts, and projected collections of recoveries for MBIA Corp., reflect resources that we expect to be adequate to pay expected insurance claims. However, there can be no assurance that MBIA Corp. will realize its expected recoveries in full or on its projected timeframe. Refer to "Risk Factors-MBIA Corp. Risk Factors-Continuing elevated loss payments and delay or failure in realizing expected recoveries on insured transactions may materially and adversely affect MBIA Corp.'s statutory capital and its ability to meet liquidity needs and could cause the NYSDFS to put MBIA Insurance Corporation into a rehabilitation or liquidation proceeding if the NYSDFS concludes that MBIA Insurance Corporation will not be able to pay expected insurance claims," in Part I, Item 1A of this Form 10-K. Given the separation of MBIA Inc. and MBIA Corp. as distinct legal entities, the absence of any cross defaults between the entities, and the lack of reliance by MBIA Inc. on MBIA Corp. for the receipt of dividends, we do not believe that a rehabilitation or liquidation proceeding of MBIA Insurance Corporation by the NYSDFS would have any material economic impact on MBIA Inc. OUR INSURANCE OPERATIONS Our U.S. public finance insurance portfolio is managed through National, and our international and structured finance insurance portfolios are managed through MBIA Corp. We do not expect National or MBIA Corp. to write new financial guarantee policies outside of remediation related activities. We have been compensated for our insurance policies by insurance premiums that were paid upfront or on an installment basis. Our financial guarantee insurance was offered in both the new issue and secondary markets. In addition, we have provided financial guarantees or sureties to debt service reserve funds. The primary risk in our insurance operations is that of adverse credit performance in the insured portfolio. When writing new business

Business (continued)

Item 1. Business (continued) All of the policies were underwritten on the assumption that the insurance will remain in force until maturity or early retirement of the insured obligations. National estimates that the average life of its domestic public finance insurance policies in force as of December 31, 2023 is 9 years. The average life was determined by applying a weighted average calculation, using the remaining years to contractual maturity and weighting them on the basis of the remaining debt service insured. No assumptions were made for any future refundings, early redemptions or terminations of insured issues. Average annual insured debt service on the portfolio as of December 31, 2023 was $4.1 billion. National's underwriting guidelines limited the insurance in force for any one insured credit, and for other categories such as geography. In addition, National is subject to regulatory single-risk limits with respect to any insured bond issue. See the "Insurance Regulation" section below for a description of these regulatory requirements. As of December 31, 2023, National's gross par amount outstanding for its ten largest insured U.S. public finance credits totaled $7.8 billion, representing 27.5% of National's total U.S. public finance gross par amount outstanding. Refer to "Note 13: Insurance in Force" in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for further information regarding the Company's operating companies' insured portfolios. MBIA Corp. Insured Portfolio MBIA Corp.'s insured portfolio consists of policies that insure various types of international public finance and global structured finance obligations that were sold in the new issue and secondary markets. International public finance obligations include bonds and loans extended to entities located outside of the U.S., including utilities, infrastructure projects and sovereign-related and sub-sovereign issuers, such as regions, authorities or their eq

Business (continued)

Item 1. Business (continued) The Company's Risk Oversight Committee (the "Risk Oversight Committee") reviews material transactions and provides firm-wide review of policies and decisions related to credit, market, operational, legal, financial and business risks. The Company and its subsidiaries' respective Loss Reserve Committees review loss reserving activity. The Company's Board of Directors and related Committees, including Audit, and Finance and Risk, oversee risks faced by the Company and its subsidiaries. The Board regularly evaluates and discusses emerging risks and risks associated with strategic initiatives. On an annual basis, the Board also evaluates and approves th

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