MBIA Inc (MBI) 2016 Q4 法說會逐字稿

Welcome to the MBIA Inc. fourth quarter and full-year 2016 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.

Thank you, Laurie. Welcome to MBIA's conference call for our fourth quarter and full-year 2016 financial results. After the market closed yesterday, we issued and posted several items on our websites, including our financial results press release, 10-K, quarterly operating supplements, and statutory financial statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation. We also posted updates to the listing of our 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 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 press release and our quarterly operating supplements. The recorded replay for today's call will become available approximately two hours after the end of the call, and the information for accessing it is included in yesterday's financial results press release.

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-Ks 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. 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, Jay Brown, Anthony McKiernan, and Bill Fallon will provide some introductory comments. Then a question-and-answer session will follow. Now, here's Jay.

Thanks, Greg. Good morning to everyone on the call. Thank you for joining us today.

Although our reported income statement numbers were clearly a disappointment, our balance sheet continued to grow stronger, albeit smaller, which will be a key to creating long-term shareholder value over the next few years. I'm pleased to note that we've successfully completed several significant objectives since our last conference call. Anthony and Bill will address those accomplishments in greater detail, and I will add that these accomplishments collectively have helped us to further improve the overall perception of our Company. More importantly, they have also helped move us closer to a first special dividend to be paid by National.

In the meantime, our Insurance Company's insured portfolios continued to significant decrease, and we believe that the number, volatility, and magnitude of remaining problem credits have also moderated. In addition, as National's statutory capital has grown and its operating leverage has decreased markedly, its excess capital position has continued to increase.

We have not repurchased any shares of our common stock since our last conference call, primarily due to a lack of significant excess liquidity at the Holding Company, given the short-term potential needs and the run-up of our stock price through the end of the year. However, over the course of the year 2016, we did purchase 16.6 million shares at an average price of $6.37 per share, and that had the greatest consistent contribution to the $2.90 increase in our Company's adjusted book value during 2016. Our year-end adjusted book value stands at $31.88. Stay tuned in 2017 and beyond as our Holding Company's liquidity is now in great shape over the next few years.

We have another $88 million to repurchase shares under the existing authorization from our Board. Share repurchases are likely to be the most significant tool that we will have to increase adjusted book value over the near term, until National's guarantee is more you widely accepted by the market, which I believe will be primarily a function of the rating agencies reflecting National's absolute financial strength and the strong business model in their ratings of National. As I mentioned earlier, subject to receiving regulatory approval, we are moving much closer to National paying a special dividend that would enhance our Holding Company's resources to repurchase shares or deploy in other ways to enhance our shareholder value.

On the new business front, we are very pleased with the progress National has made regarding its reentry into the marketplace, especially given that its S&P rating continues to be one notch below its two new business competitors. Bill will have more to say about that in his remarks.

Anthony will cover financial results and will highlight our accomplishments regarding MBIA Insurance Corp.'s ability to continue to satisfy its insurance obligations, including the payment we made on the Zohar II CDO which came due in January of this year. I don't know that it's fully appreciated what MBIA Insurance Corporation has done over these past nine years, as it has satisfied over $17 billion in gross loss payments since the onset of the financial crisis and also reduced its outstanding gross par by $251 billion, down to $19 billion following the sale of the UK operation.

We are very proud that MBIA insurance Corp. has been able to honor all of its insurance commitments and look forward to maximizing the returns to our note holders. As we have stated in the past, we do not believe that the results from MBIA Corp. will have any material effect whatsoever on MBIA Inc. shareholder value, but we are fully committed to working for its other constituencies.

Turning to personnel matters. Yesterday, we disclosed that Ram Wertheim, our Chief Legal Officer and Secretary, stepped down from those roles effective today and will be leaving our Company at the end of this year. He has been with us since we acquired Capmac in 1998. His counsel, insights, and contributions have been quite significant, and his strong business knowledge and solid technical skills have been very valuable to our Company during his tenure here.

Over the last few years, we had already started what I expect will be a smooth transition as Jonathan Harris has been preparing to assume the responsibilities of General Counsel and Secretary. Jonathan joined the Company in 2009 as Deputy General Counsel and Head of Litigation, and immediately became engrossed in a myriad of legal actions where our Companies were either a plaintiff or a defendant. As many of those litigations have since been resolved, we have expanded Jonathan's participation in various corporate and regulatory matters. I am grateful that we have the opportunity for another orderly succession of another key role at the Company.

In addition, our Management succession plans will take another step in May, when Doug Hamilton will step down as Controller and Chief Accounting Officer. Doug joined MBIA in 2000 and has overseen our account accounting staff, as the accounting and reporting has expanded exponentially during this time here. Doug will be succeeded by Joe Schachinger, a long-time, long-term veteran who has served as Deputy Controller since 2007.

Now Anthony will provide detail on our financials and the MBIA Corp. activities, and then Bill will provide an update on National's business.

Thanks, Jay, and good morning, everyone. We end the year with National's capital continuing to strengthen, the Holding Company well positioned to meet our medium-term leverage targets, and the consolidated Enterprise in line to meet our expense reduction projections over the next two years.

This quarter, the sale of MBIA UK was the most significant event to impact consolidated GAAP earnings as well as MBIA Corp.'s statutory results. Due to the fact that the sale of MBIA UK was agreed to in Q4 but didn't close until early Q1 2017, the impact from the sale will be experienced over two quarters. While normally I would not address MBIA Corp. as it does not impact value to shareholders, as the sale of UK distorts our results over two quarters, I will spend a few minutes this morning on the topic.

The Company reported a consolidated GAAP net loss of $265 million, or $2.01 per diluted share, for the fourth quarter of 2016, compared to consolidated net income of $82 million or $0.54 per diluted share for the fourth quarter of 2015. The unfavorable change was overwhelmingly due to a pretax $278 million asset impairment from the sale of MBIA UK.

The $278 million charge resulted from a write-down of MBIA UK's carrying value to the fair value of MBIA UK, which reflected the expected net consideration to be received from the sale of the company. As the sale occurred in Q1 2017, an increase of approximately $108 million will occur in GAAP equity due primarily to the reversal of net losses within accumulated other comprehensive income related to MBIA UK.

The Company reported a consolidated GAAP net loss of $338 million, or $2.54 per diluted share, for the year ended December 31, 2016, compared to net income of $180 million, or $1.06 per diluted share, for the prior year. The unfavorable variance in the financial result versus the prior year was primarily due the to the previously mentioned $278 million pretax impairment from the sale of MBIA UK and a $148 million reduction of net gains on insured credit derivatives.

I'm now going to spend a few minutes discussing MBIA Corp.'s statutory results, primarily to walk through the impact of the sale of MBIA UK. MBIA Corp. had a statutory net loss of $179 million for the fourth quarter of 2016, versus statutory net income of $79 million in the fourth quarter of 2015. The Q4 2016 results included a $114 million asset impairment due to the then pending sale of MBIA UK.

Similar to GAAP, the $114 million charge was due to a write-down of the statutory carrying value of MBIA UK to its fair value. After other adjustments, the net decrease in statutory capital for the quarter due to the UK sale was $101 million. As the sale of MBIA UK was completed in the first quarter of 2017, in Q1, due primarily to the reversal of remaining non-admitted value of MBIA UK upon its sale and other related adjustments, MBIA Corp. will have an increase to statutory capital of $130 million. Therefore, after giving full effect to the sale of MBIA UK and MBIA Corp.'s statutory financial statements over the two quarters, the impact of the sale of MBIA Corp.'s statutory capital is an increase of $29 million.

To illustrate this point, as of December 31, 2016, the statutory capital of MBIA Corp. was $492 million. On a pro forma basis, for the first quarter 2017, considering only the effects of the MBIA UK sale, MBIA Corp.'s statutory capital increases to $622 million.

As of December 31, 2016, MBIA Corp.'s liquidity position, excluding its subsidiaries and branches, totaled $201 million, consisting of cash and liquid invested assets. As previously reported, on January 20, 2017, MBIA Corp. satisfied its insurance obligations related to the maturity of $770 million of outstanding principal on the Zohar II notes.

To facilitate its ability to satisfy its insurance obligations on the Zohar II notes, MBIA Corp. received $347 million of Zohar II notes in exchange for the sale of MBIA UK, borrowed $363 million from the new financing facility that was established during the first quarter of 2017, and used approximately $60 million of its own liquidity. Claims paying resources totaled $1.9 billion as of 12/31/16. MBIA Corp.'s plan at this point is near-term liquidity management and devoting our primary focus on asset recovery related to our Credit Suisse RMBS litigation and the Zohar CDOs.

Turning to combined operating income, our primary non-GAAP metric of short-term performance, combined operating loss for the fourth quarter of 2016 was $6 million, or $0.05 per diluted share, compared to combined operating income of $10 million, or $0.07 per diluted share, for the fourth quarter of 2015. The unfavorable change was driven by National's $18 million increase in loss and loss adjustment expenses and $16 million reduction in net premiums earned. Approximately 80% of National's increase in loss and LAE expense versus last year's quarter was due to a change in discount rates and not due to changes in our credit views of our Puerto Rico exposures or any new classified list credits.

Combined operating income for the full year 2016 was $30 million, or $0.23 per diluted share, compared to $87 million, or $0.52 per diluted share, for the full year 2015. The decline in combined operating income for 2016 compared to 2015 was driven primarily by National's $69 million of higher loss and loss adjustment expenses and $68 million reduction of net premiums earned.

For the full year, the increase in loss and loss adjustment expenses was due to a combination of changes in our discount rates due to rising interest rates, changes to probability-weighted cash flow scenarios for certain credits, and the addition of credits to our classified list. Due to the Company's net operating loss carry-forward, we are not currently subject to paying federal income tax, although we include a provision for tax.

Our calculation of adjusted book value per share was refined in the fourth quarter of 2016 to exclude MBIA Corp. on a legal entity basis. The previous calculation excluded our international and structured finance insurance segment, which had a different accounting definition than the legal structure of MBIA Corp. The impact of the change was a reduction in our previously reported ABV as of December 31, 2015, of $0.71 per share, to $28.98 per share. As of December 31, 2016, ABV was $31.88 per share.

As Jay mentioned, the largest factor contributing to the $2.90 increase in ABV per share was the decrease in common shares outstanding due to share repurchases. During 2016, the Company repurchased 16.6 million shares of its common stock, which reduced its common shares outstanding to 135 million as of year end 2016. We did not repurchase any shares in the fourth quarter.

Now I would like to take a few moments to walk through highlights in the two operating segments, corporate and US public finance. The corporate segment recorded GAAP net income of $26 million for the fourth quarter of 2016, versus a net loss of $15 million for the comparable prior-year quarter. The $41 million favorable variance was primarily driven by a favorable change in the fair value of interest rate swaps and currency-related gains related to the global funding MTNs.

For the full year 2016, the corporate segment recorded a GAAP net loss of $93 million, versus a net loss of $21 million in 2015, due to lower FX gains and a prior-year gain related to the sale of our investment management subsidiary. The corporate segment had a fourth-quarter 2016 operating loss of $31 million, versus an operating loss of $34 million for Q4 2015, and a net operating loss for the year of $90 million, versus $101 million for the prior year, due primarily to lower interest expense.

As of 12/31/16, MBIA Inc. had an ending liquidity position of $403 million, which excluded its tax escrow account balance of $329 million, as well as approximately $700 million in assets pledged to the GICs and interest rate swaps. The corporate segment's total assets as of 12/31/16 were $2.5 billion, which includes a deferred tax asset of approximately $1 billion. Of note, MBIA Inc. received a $118 million as-of-right dividend from National as scheduled in Q4 and received a tax escrow release of $94 million in January 2017.

US public finance's GAAP net income was $41 million for Q4 2016, versus $51 million for the fourth quarter of 2015, due to a higher loss in LAE and lower earned premiums. For the full year 2016, National recorded GAAP net income of $176 million, versus net income of $191 million for the prior year. The decrease is due to higher loss in LAE expense and lower earned premiums, somewhat offset by investment gains.

US public finance's Q4 2016 operating income was $25 million, compared to $44 million in 2015's Q4, and $120 million for the year 2016, versus $188 million in 2015. Similar to our GAAP results, the drivers of the reduced income were lower earned premiums and higher loss in LAE, primarily associated with Puerto Rico.

National's capital adequacy and liquidity positions remain extremely strong, anchored by National's $4.2 billion investment portfolio which is primarily comprised of highly rated marketable securities. Now, I will turn it over to Bill who will provide further guidance on National.

Thanks, Anthony. Good morning, everyone. As Jay and Anthony have noted, National has continued to make strong progress despite a difficult interest rate environment. I'll comment on our new business production activities, capital strength, and Puerto Rico exposures.

During the fourth quarter of 2016, National insured $871 million of par value in the primary and secondary markets combined. Was our highest quarterly production since re-entering the market. For the full year, National insured $1.6 billion of par, which was almost triple the $597 million that we insured in 2015, and insured over 100 issuer client transactions.

Given our emphasis on sound credit underwriting, we do not set business production targets, but we are confident that our production will continue to grow, especially as we further increase the market's understanding of National's strong business model and capabilities and as we move closer to achieving credit ratings parity with our bond insurance competitors.

We also believe that higher interest rates will help to increase insurance production for our industry. The bond insurance industry penetration for 2016 was 5.7% of total municipal issuance, compared to 6.2% penetration for 2015; although, insured par on an absolute basis increased slightly year over year. Of the insurable market, that is new issue municipal bonds with BBB through A ratings, the insured penetration was 13% for 2016 and 14% for 2015.

While potential tax code changes are currently being discussed, it is too early to know the precise impact on the municipal market. However, any changes that increase borrowing costs will highlight the value of bond insurance to municipal issuers. As I've said before, we remain confident that our industry will experience growth over the coming years, in large part due to the value that bond insurance provides to issuers and investors, and we believe National is well positioned to participate in that growth.

From a financial perspective, National ended the year in a strong position, with $3.5 billion of statutory capital and $4.6 billion of claims paying resources. As National's insured portfolio continues to amortize, its capital position and its capital ratio continue to improve. National's insured portfolio reduced by another $15 billion of gross par during the fourth quarter of 2016, ending the year at $110 billion of gross par outstanding.

Year over year, National's insured portfolio decreased by $51 billion. National ended the year with a leverage ratio, gross par to statutory capital, of 32 to 1, down from 48 to 1 at year end 2015. We have estimated under S&P's existing stress test that National had about $1.7 billion of excess capital relative to S&P's AAA capital requirement as of 12/31/16.

As we mentioned on last quarter's conference call, we plan to have National pay several special dividends over several years. We intend to seek approval for National to pay its first special dividend as we continue to make further progress with favorably resolving our insured Puerto Rico exposures. This would be in addition to the as-of-right dividend that National expects to pay to MBIA in the fourth quarter.

On Tuesday, Puerto Rico Governor Rossello submitted a 10-year fiscal plan to the PROMESA Oversight Board as required. The board has set a March 15 target to certify a fiscal plan. While the plan does not detail restructuring proposals, it states that a strategic imperative is consensually renegotiating and restructuring debt obligations through Title VI of PROMESA.

Furthermore, the plan emphasizes the need for long-term economic development in Puerto Rico, which we believe is of critical importance for all stakeholders. We expect engagement with the commonwealth this month regarding PREPA and our other Puerto Rico credits.

In January, the governor asked the PREPA creditors for an extension until the end of March to review the restructuring support agreement that almost 70% of PREPA's bondholders reached with PREPA. While we await the Governor's review, we continue to believe that the PREPA restructuring support agreement provides a workable framework for resolving PREPA's credit profile in a way that's well balanced and fair to all parties and is consistent with the strategic imperative put forth by the Governor to negotiate consensual deals with creditors and the Governor's energy reform agenda.

We expect to continue to work with the Governor and other commonwealth officials, the Oversight Board, and other creditors to address Puerto Rico's challenges, while aggressively pursuing the repayment of all national insured debt and the claims we have already paid. Overall, we continue to believe that there are reasonable approaches for favorable outcomes of the Puerto Rico credits that we've insured.

Outside of Puerto Rico, the other credits in National's insured portfolio are performing within our expectations. Now we will open the call up for your questions.

(Operator Instructions)

Your first question comes from the line of Chas Tyson of KBW.

Hey, guys. Good morning. First question, I just wanted to ask about the excess capital [position], how you're thinking about returning that to shareholders. I know you said that you're looking to resolve the Puerto Rico situation and then potentially seek approval. Is that something that could be in 2017 assuming that they go according to the Oversight Board's timeline?

The answer is yes. Given the developments in Puerto Rico and the expectation, as I mentioned, that we will be engaging in a meaningful way, starting with PREPA, we would expect it's very possible, and we would hope that we could have a special dividend before the end of the year. But as you know, the timing is always a little bit hard to predict with precision. But yes, that is the hope and the plan.

Okay. And then on PREPA, I know that there's been some media reports of varying discussions on that utility and what may or may not being sought by the Governor and his associates. Is that a deal where you guys are willing to go back to the table and negotiate further and potentially take a haircut commensurate with other creditors, or is that something where you're happy to stay put where you are?

I think at this point, we're going to wait. As I said, the Governor asked for time to review the agreement. We believe he's doing that right now. As I said, we expect that we will hear from the Governor and his advisors and administration shortly.

Okay. And then last one just on new business and your market share. Looked like it ticked up nicely in the fourth quarter. Can you just talk about what you saw in the market in 4Q from the market overall and competitors, then how you're thinking about penetration going forward as interest rates potentially rise?

Yes. In terms of the increase in interest rates, keep in mind, 2016, we saw extremely low, really historically low, interest rates. We start 2017 about where interest rates were at the beginning of 2016.

However, the expectation, obviously, that interest rates will continue to go up, which we think is very good for the industry because first and foremost, we believe that it is very important for the industry to grow. We think the value proposition that the industry provides is critical and is very compelling to both issuers and investors.

In terms of what we saw last year, some of it is unrelated to interest rates and the competition given the reentry that National had a few years ago. We continue to reach out, talk to more market participants, gain greater acceptance, really getting people to use the insurance and then see the value of it, especially in the trading value.

So a lot of this is just the ongoing effort, a little bit of a snowballing effect. And while we don't expect it every quarter, we'll see an increase in par insured. We do think the long-term trend is definitely headed up as we saw throughout 2016.

Okay. Thanks very much, guys.

Your next question comes from the line of Andrew Gadlin of Odeon Capital Group.

Hi, guys. Thanks for taking my question. Just another couple questions probably on the special dividend. How do you balance the desire to pull cash out of National with, I assume, a desire to get an upgrade to AA, or is it actually not that meaningful to you to have the upgrade?

The upgrade is very important to us, as we said all along. And again, that's why we emphasized the excess capital that we have. While there are multiple factors the rating agencies look at, in particular, when we emphasize the S&P model, in terms of capital strength, we are AAA under that factor.

And given the capital model that is used, we have, as I stated, by our estimation, $1.7billion above the AAA level. Now, we're not going to pull out $1 billion or $1.7 billion, which if you think about the models, you could do and still be AAA, but we think there's plenty of room there to have special dividends and still maintain our capital strength, and ultimately move up to a higher rating.

Got it. And then in terms of PREPA, if I could ask a question there, because it ties into -- just given the amount of debt service in the near term, it tied together, I think. There's about $175 million of debt service in PREPA coming this July. Do you expect as these conversations with Governor Rossello move forward -- they made payments on debt service in January out of just the cash flow from PREPA. Do you expect them to do the same thing in July?

You're talking about on PREPA now?

Yes, exactly because I -- since this July 1, there's $175 million due July 1 roughly. I'd assume that those two issues are tied together, a special dividend and whether or not PREPA makes its debt service on its own, July 1.

First of all, with regard to PREPA, as I said, we expect meaningful discussions to start pretty soon on those, so we'll see whether or not they're going to make a payment in July. At this point, that's scheduled and we would expect that they will make that payment, though we'll wait and see what's [deeded] in terms of the overall discussions with them. That is not tied to the special dividend.

Keep in mind, the $170 million or so that you just referenced, that really deals with the liquidity that National needs, and National, as was pointed out by Anthony, has over $4 billion of very highly rated liquid securities. So we can make any payments.

And that also is different than the ultimate losses that we might have on any credit, whether that be PREPA or any other credit that we might pay because we often have 100% recovery on some of these. That's not an estimate as to specifically what would be recovered under any of the payments made on the Puerto Rico credits, but the -- a payment on a claim is not going to have an impact on the special dividends that we seek later this year as I outlined earlier.

So when you think about that liquidity mismatch potential, if you're going to get 100% recovery, but cash could go out the door near term, do you think that has an impact on your S&P rating and has an influence on whether or not you can get an upgrade?

No, it won't have an impact on our rating in an adverse way that I think you're implying. In terms of giving an upgrade, the rating agency, in particular S&P, has looked at the Puerto Rico exposure several times. They've stress tested it, and they still say that we have, by our estimate, $1.7 billion of excess above the AAA. So from a capital perspective, we are very strong in terms of the way the rating agency looks at it.

In terms of proceeds for the special, what would you think? Go to share buybacks, or would it be debt reduction?

Probably a bit of both. We'll look at what opportunities, where we can optimize, but we are focused on our leverage targets at the Holding Company. At the same time, we think we're in a position now where when we see fit, we will also be able to take advantage of share repurchases without any real concerns at all about the Holding Company's liquidity cushion.

Got it. And so it will be a little bit of both, presumably.

Yes.

Okay. Thank you very much.

(Operator Instructions).

Your next question comes from the line of Michael Temple, a private investor.

Good morning, gentlemen. Thank you for taking my call. Couple of quick questions. You noted that with amortizations year over year, that your leverage ratio came down rather meaningfully, from 48 to 1 to 32 to 1.

As you look forward in 2017, any guidance as to what you project year-end 2017 leverage to look like? Do we see a similar reduction of roughly 16 turns? How do you look at that?

A couple comments with regard to leverage. Keep in mind that historically the bond insurers, if you go back pre financial crisis when you had both public finance and structured, it was not unusual for that leverage number to be in excess of 100 to 1. So the level that we're now operating at is really probably below any ideal level.

It is a very strong balance sheet at this point in time. In fact, the S&P criteria to be a AAA bond insurer, requires that you have leverage lower than 75 to 1 because historically, getting below 75 was viewed to be something that was extremely unlikely. So the fact that we went from 48, to 32 to 1 over the course of the year, yes, in the early part of this year, you're going to see a further reduction in the leverage.

But it's not something that we're setting a target that we want to get below 25 or below 20. In fact, if anything, as I said, the level that we're operating at when we get new business to a higher level and we've dealt with Puerto Rico may change as well.

Okay. Couple more quick follow-up questions. With regard to re-engaging your primary business, and again, thank you for sharing with us those figures, in your mind -- I know this is a finger-to-the-wind of question, but do you get a sense that there could be a very large acceleration in your ability to write new business upon favorable ratings actions from S&P and/or favorable resolution to Puerto Rico to put investors further at ease that Puerto Rico's truly a rear-view-window problem for you and the industry?

I think several things. One, an increase in interest rates, as I mentioned, while that won't see a step function change at any point in time, the fact that the expectation is that they will increase, if in fact they do, we think that will drive our activity up as well as the industry.

I think then the two things you mentioned, being Puerto Rico as the first one, we think that might have a step function increase. I'm not going to predict how much that would be. And then second, getting to ratings parity with the competition, which was the other point you mentioned, same thing. We would see a step function increase, but I'm not in a position to tell you it goes from X to Y. But I think you're correct directionally in the impact those two items would have.

All right. Thank you. And then just one final question, and again, forgive me for not perhaps appreciating the nuance.

As of now, you have additional buyback authority remaining of approximately $88 million, you stated. You also stated -- I just want to make sure I have this right -- you do have pending special dividend requests in front of the respective insurance boards, and then you hope to have an additional special dividend request upon some favorable resolution of Puerto Rico? Is that correct? And if so, are you able to disclose at this time what you think the already special dividend might be, again, leaving Puerto Rico aside?

Just the way the process works, we're regulated by the New York Department of Financial Services -- that's New York State Department of Financial.

Correct.

So a special dividend from National up to MBIA Inc. requires DFS approval. We have not put in a request at this point in time for approval of a special dividend. What I did mention, I think, in addition to our plan of getting several special dividends over several years is we have an as-of-right dividend that would be paid in the fourth quarter of 2017 from National up to MBIA Inc.

And can you share that dollar amount figure at this time or --?

The as-of-right dividend this year was about $118 million. I would expect over the next year, it would be a similar amount, next fourth quarter.

All right. Thank you very much, gentlemen.

At this time there are no further questions. I will now return the call to Greg Diamond for any additional or closing remarks.

Thank you, Laurie. And thanks to all of you for listening to the call. Please contact me directly if you have additional questions. We also recommend that you visit our website at MBIA.com for additional information on the Company.

Thank you for your interest in MBIA. Good day, and good-bye.

Thank you for participating in today's conference call. You may now disconnect your lines, and have a wonderful day.