Very good. Thank you, Todd. Welcome to MBIA's conference call for our third quarter 2023 financial results. 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 National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance company's insurance portfolios. Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K, 10-Q 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 definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K and 10-Qs as well as our financial results report and our quarterly operating supplement. The recorded replay of today's call will become available approximately two hours after the end of the call and the information for accessing it is included in last week's press announcement and in the financial results report posted yesterday on MBIA's website. Now for our safe harbor. Our remarks on today's conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause our actual results to differ materially from the projected results referenced in our forward-looking statements. Risk factors are detailed in our 10-K and 10-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 Anthony McKiernan will provide introductory comments, and then a question-and-answer session will follow. Now here's Bill Fallon.

Thanks, Greg. Good morning, everyone. Thank you for being with us today. We are continuing our efforts to resolve our last material exposure to Puerto Rico, which is the Puerto Rico Electric Power Authority, or PREPA. Regarding PREPA, at the end of the third quarter, National's remaining exposure to PREPA was $610 million of gross par insured. The Puerto Rico Oversight Board filed an amended plan of adjustment for PREPA in August, which provides substantially less consideration for bondholders than the original plan. The confirmation hearing for this amended plan is scheduled to begin on March 4 of next year. In conjunction with the PREPA plan, National entered into an amended plan support agreement providing for a lower potential recovery than previously agreed in January. The terms of the amended PSA contributed to the adverse change in National's loss and loss adjustment expense for the quarter. Regarding National's insured portfolio, those credits, other than PREPA, 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 2022 to $29.1 billion at the end of the third quarter. National's leverage ratio of gross par to statutory capital at the end of the second quarter remained unchanged from year-end 2022 at 16:1. At the end of the third quarter, National had total claims paying resources of $2.3 billion and statutory capital and surplus of $1.8 billion. Now Anthony will provide additional comments about our financial results.

Thanks, Bill, and good morning. I will begin with a review of our third quarter 2023 GAAP and non-GAAP results. The company reported a consolidated GAAP net loss of $185 million or negative $3.94 per share for the third quarter of 2023 compared to a consolidated GAAP net loss of $34 million or negative $0.67 per share for the third quarter ended September 30, 2022. The higher GAAP net loss this quarter was largely driven by loss in LAE expense this quarter at National related to PREPA, reflecting an updated range of recoveries under the amended PSA. The company's adjusted net loss, a non-GAAP measure, was $138 million or a negative $2.92 per diluted share for the third quarter of 2023 compared with an adjusted net loss of $17 million or a negative $0.34 per diluted share for the third quarter of 2022. The unfavorable change was primarily due to the higher loss in LAE at National. MBIA Inc.'s book value per share decreased to a negative $24.22 per share as of September 30, 2023, versus a negative $16.07 per share as of December 31, 2022, primarily due to the net loss for the year and second quarter 2023 share repurchases, partially offset by the release of credit losses recorded to other comprehensive income, driven by derisking activity at MBIA Corp. Included in book value as of September 30, 2023, is a negative $43.56 per share book value of MBIA Corp. I will now spend a few minutes on the corporate segment balance sheet and our insurance company's statutory results. The corporate segment, which primarily includes the activity of the holding company, MBIA Inc., had total assets of approximately $564 million as of September 30, 2023. Within this total are the following material items. Unencumbered cash and liquid assets held by MBIA Inc. totaled approximately $194 million as of September 30, 2023, in line with last quarter and lower compared with $230 million as of December 31, 2022, due to $6 million of holding company common share buybacks in Q3 and the repurchase of $10 million of 2024 maturity GFL MTNs at a discount in Q2 and debt service and operating expenses. The Corporate segment's assets also included approximately $249 million of assets at market value pledged to the GICs and the interest rate swaps supporting the legacy GIC operation. Turning to the insurance company's statutory results. National reported a statutory net loss of $133 million for quarter ended September 30, 2023, versus a statutory net loss of $25 million for the quarter ended September 30, 2022. This unfavorable comparison was primarily due to higher loss in LAE related to PREPA. Statutory capital decreased by $159 million from year-end 2022 and was $1.8 billion as of 9/30/2023, primarily due to the year-to-date net loss and National's purchase of MBIA Inc. shares during the second quarter. Claims paying resources were $2.3 billion. In July, National paid gross claims of $119 million on the PREPA bonds and insurers. Turning to MBIA Insurance Corp. Its statutory net loss was $14 million for the third quarter of 2023 compared to statutory net income of $50 million for the third quarter of 2022. The unfavorable comparison was primarily due to a significantly lower loss in LAE benefit in Q3 2023 related to salvage on Zohar CLO claims paid and, to a lesser extent, higher loss in LAE expense in Q3 2023 on insured RMBS due to higher interest rates and credit losses. As of September 30, 2023, the statutory capital of MBIA Insurance Corp. was $145 million, down from $169 million at year-end 2022, primarily due to its year-to-date net loss. Claims paying resources totaled $502 million versus $669 million at year-end 2022 due in part to a reduction in gross loss reserves associated with several deal liquidations and the year-to-date net loss. MBIA Corp.'s insured gross par outstanding reduced by approximately $300 million during the quarter and was $2.9 billion as of September 30, 2023. And now we will turn the call over to the operator to begin the question-and-answer session.

Our first question will come from Tommy McJoynt with KBW. Please go ahead.

Hi. Good morning, guys. Thanks for taking my questions. The first one here is kind of a multi-parter around capital and buybacks, so I'll ask it all together. So what is National's statutory capacity for buybacks at the current stock price? Also, what was the regular as-of-right October dividend out of National to the holding company? And then kind of the third part there is, why did the buybacks this quarter happen out of MBIA Inc. holdco rather than National?

Good morning, Tommy, it's Anthony. Let me start with National's capacity. At the end of the third quarter, National had about $100 million of share repurchase capacity. And the shares at that point, I believe we're about $7.21. So that was the capacity for National. I'm sorry, tell me again your second question? The as-of-right dividend actually doesn't get paid until November and we would anticipate a $97 million as-of-right dividend being paid in November. Your third question on Inc. not National, part of it had to do with timing issues and plan we had in place at MBIA Inc. that governed our share repurchases at the time. We were governed by the plan because of material nonpublic information we purchased. So we had to go by the plan. So Inc. was the purchaser of the shares at that point.

So that was sort of an anomaly not something we should think of as likely to be sustained going forward, buybacks should continue to be done out of National?

Tommy, it's Bill. Generally, I think that's correct. As you know, we have substantial capital at National, as Anthony mentioned, as well as capacity, and we're always looking at how much capital as well as liquidity. And as you know, at the holding company, while there is plenty of liquidity to service its obligations, there's just been much more capacity at National.

Okay. Thanks. And then my second question on PREPA and the mark you took. So how much of the PREPA related loss in LAE provision this quarter was from actual lower recovery dollars expected in the plan? And then how much was just more of a time value of money with the extension of that planned expected settlement date? And then does your scenario analysis that you alluded to give any weight or probability to an extended sort of drawn-out legal battle if some of the opposing bondholders successfully challenged the latest plan of adjustment?

So let me answer that in a few ways. One is the loss for the quarter was primarily due to lower recovery estimates versus timing. Timing certainly was a factor, but it was driven by the lower recovery levels in the amended PSA versus the prior deal that we were engaged in. So lower recoveries drove that. Second, we have factored in, in the scenarios various downside possibilities primarily at this point, just dealing with confirmability issues and the legal risks and appeals that are out there today. So we did factor that into the loss reserves in the quarter, which were additional losses in addition to the absolute lower recoveries that the deal we're in would employ.

Got it. Thanks. And then just my third question here. Since you've started the kind of strategic alternative review process, and I know that's effectively on pause right now, we have seen a really sharp increase in interest rates. Does that at all impact kind of your valuation of your strategic alternatives, just the higher overall rate environment and potentially the slower runoff of the portfolio that ensues.

Yes, two parts to that. So in terms of the slower runoff that you mentioned at the end, refundings, which is often determined by the interest rate environment, have slowed substantially even before the recent increase in interest rates. And just given where our portfolio is in a long period of low interest rates, generally speaking, most of the refundings that we would anticipate taking place have probably, at this point, been done. So we see very little in terms of early refundings, and that's been true now for quite a while. With regard to the first part, which is around the valuation like many other companies, given the fact that we have a large investment portfolio, primarily of fixed income, clearly, changes in interest rates would impact the value of that.

Okay. Thank you.

Our next question will come from John Staley with Staley Capital Advisers.

Bill, obviously, this continues to be a very frustrating experience, but you've just tell me in plain English a couple of things. One, are you going to resume the buyback program where you appear to have such as $70 million less. And secondly, you commented on interest rates and rather not the second issue of the Oversight Board, is this last deal now, the revision, which is pushed to the end of first quarter of '24? To your best estimate, do you think that's it? Are these guys going to squeeze more out of the limit? And how much has this truly impacted the intrinsic value of MBIA to an acquirer. I'm very confused about the status of the buyback. I'm very confused about how the value of MBIA, the intrinsic value, to particularly a strategic acquirer has been impacted by all this.

Good morning, John. Thank you for your questions. Regarding the buybacks, we are continually assessing our liquidity, capacity, and the stock's trading performance. As Anthony mentioned, we may have trading plans at various times, but there are moments, like at the end of a quarter or during blackout periods and when we possess material nonpublic information, when we might not be able to buy shares. However, we've consistently stated that buybacks are a lever we can use to enhance shareholder value, and we will keep considering this option. If conditions align, we aim to buy back shares, and we do have capacity for that. Concerning the Oversight Board and PREPA with the amended plan, I'd like to say that the hearing in March will confirm the plan, and everything will be executed soon after. However, as you've been a long-term shareholder, and since we've been working on this for nearly seven years, I would be remiss to claim that this will be resolved quickly or easily. We hope for a positive outcome, but we're closely monitoring the situation, which has proven difficult to navigate. We will continue our efforts, and we hope we are nearing the conclusion of the PREPA restructuring.

It has to be equally frustrating to you that you are a major shareholder as well. I mean when do these bureaucrats finally say enough is enough?

That is the $64,000 question. I guess, in our case, even more than that, $610 million, I think, is what we have left. So we hope it's coming to a conclusion and for all sorts of reasons, including the strategic sale that we started last year. We'd like to get that resumed as soon as possible.

Thank you. Our next question comes from Giuliano Bologna with Compass Point. Please go ahead.

Good morning. One thing I'd be curious about is you obviously have the March timeline. And obviously, we'll have to see how that unfolds for the PREPA exposure. The first part is, I'm assuming that's kind of the main trigger event to potentially resume a strategic process. But along those lines, would it make sense to pursue reinsurance transactions or other transactions that could release capital to kind of continue to accelerate returning capital to shareholders or buying down debt at the holding company at discounts?

Yes. So first of all, Giuliano, the March date that you mentioned, we think is sort of the catalyst of the trigger for moving things forward. We'll see exactly how things play out in Judge Wayne's court for the confirmation hearing in March. With regard to then the strategic alternatives, as we've suggested in the past, we think the optimal transaction would be a sale of a company as opposed to some of the other things that you suggested or other things that have been mentioned, but we'll wait and see how things play out. But that's how we're thinking about it at this point in time. And I think we feel pretty good about how this moves forward.

That's great. Thank you very much. And I'll jump back in queue.

Our next question comes from Geoffrey Dunn with Dowling & Partners.

Thanks. Good morning. As you continue to see the Oversight Board come back with these revised plans and continue to chop away at recovery, how does management and the Board evaluate signing on to a plan versus pursuing the right for litigation? Is it purely a DCF quantitative approach? Or is there more subjectivity qualitative assessments that go into that as well?

Yes. I think it's a combination of things. It's a pretty detailed analysis. It may be able to be summarized in pretty quick fashion, but there's a tremendous amount of work that goes into it, both on the litigation analysis and the likelihood is and the strength of the different arguments that have been put forth as well as the recovery. So I think everything you suggested in your question is part of the calculation that we do as we make decisions around this.

Okay. Thank you.

We have no further questions at this time. I would now like to turn the call back over to Greg Diamond for any additional or closing remarks.

Thanks again, Todd, 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 on our company. Thank you for your interest in MBIA. Good day, and goodbye.

Thank you, ladies and gentlemen. This does conclude today's MBIA third quarter 2023 financial results conference call. You may now disconnect.