Investments

6 Months Ended

Jun. 30, 2025

Note 7: Investments

Investments, excluding equity instruments, and those elected under the fair value option, primarily consist of debt instruments classified as available-for-sale ("AFS").

The following tables present the amortized cost, allowance for credit losses, corresponding gross unrealized gains and losses and fair value for AFS investments in the Company’s consolidated investment portfolio as of June 30, 2025 and December 31, 2024:


			June 30, 2025
					Allowance		Gross		Gross
			Amortized		for Credit		Unrealized		Unrealized			Fair
In millions			Cost		Losses		Gains		Losses			Value
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency		$	536	$	-	$	-	$	(12	)	$	524
	State and municipal bonds			106		-		2		(9	)		99
	Foreign governments			7		-		-		(2	)		5
	Corporate obligations			436		-		1		(99	)		338
	Mortgage-backed securities:
		Residential mortgage-backed agency		126		-		1		(13	)		114
		Residential mortgage-backed non-agency		13		-		-		(1	)		12
		Commercial mortgage-backed		14		-		-		-			14
	Asset-backed securities:
		Collateralized debt obligations		40		-		1		-			41
		Other asset-backed		122		-		1		(2	)		121
Total AFS investments			$	1,400	$	-	$	6	$	(138	)	$	1,268


			December 31, 2024
					Allowance		Gross		Gross
			Amortized		for Credit		Unrealized		Unrealized			Fair
In millions			Cost		Losses		Gains		Losses			Value
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency		$	500	$	-	$	-	$	(19	)	$	481
	State and municipal bonds			110		-		2		(11	)		101
	Foreign governments			12		-		-		(2	)		10
	Corporate obligations			496		-		1		(106	)		391
	Mortgage-backed securities:
		Residential mortgage-backed agency		127		-		-		(16	)		111
		Residential mortgage-backed non-agency		36		-		1		(5	)		32
		Commercial mortgage-backed		7		-		-		-			7
	Asset-backed securities:
		Collateralized debt obligations		71		-		1		-			72
		Other asset-backed		32		-		-		(1	)		31
Total AFS investments			$	1,391	$	-	$	5	$	(160	)	$	1,236

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

The following table presents the distribution by contractual maturity of AFS fixed-maturity securities at amortized cost, net of allowance for credit losses, and fair value as of June 30, 2025. Contractual maturity may differ from expected maturity as borrowers may have the right to call or prepay obligations.


	AFS Securities
	Net
	Amortized		Fair
In millions	Cost		Value
Due in one year or less	$	433	$	432
Due after one year through five years		91		91
Due after five years through ten years		182		162
Due after ten years		379		281
Mortgage-backed and asset-backed		315		302
Total fixed-maturity investments	$	1,400	$	1,268

Deposited and Pledged Securities

The fair value of securities on deposit with various regulatory authorities as of June 30, 2025 and December 31, 2024 was $11 million. These deposits are required to comply with state insurance laws.

Investment agreement obligations require the Company to pledge securities as collateral. Securities pledged in connection with investment agreements may not be repledged by the investment agreement counterparty. As of June 30, 2025 and December 31, 2024, the fair value of securities pledged as collateral for these investment agreements were $214 million and $213 million, respectively. The Company’s collateral as of June 30, 2025 consisted principally of U.S. Treasury and government agency and corporate obligations, and was primarily held with major U.S. banks.

Impaired Investments

The following tables present the non-credit related gross unrealized losses related to AFS investments as of June 30, 2025 and December 31, 2024:


			June 30, 2025
			Less than 12 Months					12 Months or Longer					Total
			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
In millions			Value		Losses			Value		Losses			Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency		$	14	$	-		$	121	$	(12	)	$	135	$	(12	)
	State and municipal bonds			6		-			61		(9	)		67		(9	)
	Foreign governments			-		-			5		(2	)		5		(2	)
	Corporate obligations			11		(2	)		277		(97	)		288		(99	)
	Mortgage-backed securities:
		Residential mortgage-backed agency		-		-			95		(13	)		95		(13	)
		Residential mortgage-backed non-agency		-		-			6		(1	)		6		(1	)
		Commercial mortgage-backed		2		-			5		-			7		-
	Asset-backed securities:
		Collateralized debt obligations		12		-			-		-			12		-
		Other asset-backed		19		-			26		(2	)		45		(2	)
Total AFS investments			$	64	$	(2	)	$	596	$	(136	)	$	660	$	(138	)

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)


			December 31, 2024
			Less than 12 Months					12 Months or Longer					Total
			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
In millions			Value		Losses			Value		Losses			Value		Losses
AFS Investments
Fixed-maturity investments:
	U.S. Treasury and government agency		$	41	$	(1	)	$	123	$	(18	)	$	164	$	(19	)
	State and municipal bonds			15		(1	)		63		(10	)		78		(11	)
	Foreign governments			5		-			5		(2	)		10		(2	)
	Corporate obligations			25		(1	)		302		(105	)		327		(106	)
	Mortgage-backed securities:
		Residential mortgage-backed agency		5		-			100		(16	)		105		(16	)
		Residential mortgage-backed non-agency		6		(1	)		21		(4	)		27		(5	)
	Asset-backed securities:
		Collateralized debt obligations		6		-			8		-			14		-
		Other asset-backed		3		-			12		(1	)		15		(1	)
Total AFS investments			$	106	$	(4	)	$	634	$	(156	)	$	740	$	(160	)

Gross unrealized losses on AFS investments decreased as of June 30, 2025 compared with December 31, 2024 primarily due to lower interest rates and tighter credit spreads.

With the weighting applied on the fair value of each security relative to the total fair value, the weighted average contractual maturity of securities in an unrealized loss position as of June 30, 2025 and December 31, 2024 was 14 and 15 years, respectively. As of June 30, 2025 and December 31, 2024, there were 246 and 366 securities, respectively, that were in an unrealized loss position for a continuous twelve-month period or longer, of which, fair values of 206 and 318 securities, respectively, were below book value by more than 5%.

The following table presents the distribution of securities in an unrealized loss position for a continuous twelve-month period or longer where fair value was below book value by more than 5% as of June 30, 2025:


	AFS Securities
Percentage of Fair Value	Number of		Book Value			Fair Value
Below Book Value	Securities		(in millions)			(in millions)
> 5% to 15%		87		$	295	$	263
> 15% to 25%		51			84		67
> 25% to 50%		66			226		143
> 50%		2			-		-
Total		206		$	605	$	473

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)

As of June 30, 2025, the Company concluded that it does not have the intent to sell securities in an unrealized loss position and it is more likely than not, that it would not have to sell these securities before recovery of their cost basis. In making this conclusion, the Company examined the cash flow projections for its investment portfolios, the potential sources and uses of cash in its businesses, and the cash resources available to its business other than sales of securities. It also considered the existence of any risk management or other plans as of June 30, 2025 that would require the sale of impaired securities.

Credit Losses on Investments

The Company’s fixed-maturity securities for which fair value is less than amortized cost are reviewed quarterly in order to determine whether a credit loss exists. If the Company determines that the declines in the fair value are related to credit loss, the Company will establish an allowance for credit losses and recognize the credit component through earnings. Refer to “Note 8: Investments” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of the Company’s policy for its determination of credit losses. The Company did not purchase any credit-deteriorated assets or establish an allowance for credit losses for AFS securities for the three and six months ended June 30, 2025 and 2024.

The Company does not recognize credit losses on securities insured by MBIA Corp. and National since those securities, whether or not owned by the Company, are evaluated for impairments in accordance with its loss reserving policy. The following table provides information about securities held by the Company as of June 30, 2025 that were in an unrealized loss position and insured by a financial guarantor, along with the amount of insurance loss reserves corresponding to the par amount owned by the Company. The Company did not hold any securities in an unrealized loss position that were insured by a third-party financial guarantor as of June 30, 2025.


			Unrealized			Insurance Loss
In millions	Fair Value		Loss			Reserve (1)
Asset-backed	$	17	$	(2	)	$	18
Corporate obligations		77		(46	)		-
Total	$	94	$	(48	)	$	18

___________________

(1) - Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured and are discounted using a discount rate equal to the risk-free rate applicable to the currency and weighted average remaining life of the insurance contract and may differ from the fair value.

Sales of Available-for-Sale Investments

The proceeds and the gross realized gains and losses from sales of fixed-maturity securities held as AFS for the three and six months ended June 30, 2025 and 2024 are as follows:


	Three Months Ended June 30,							Six Months Ended June 30,
In millions	2025				2024			2025				2024
Proceeds from sales		$	61		$	27			$	123			$	55
Gross realized gains		$	-		$	1			$	1			$	1
Gross realized losses		$	(1	)	$	(2	)		$	(7	)		$	(3	)

Equity and Trading Investments

Unrealized gains and losses recognized on equity and trading investments held as of the end of each period for the three and six months ended June 30, 2025 and 2024 are as follows:

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 7: Investments (continued)


		Three Months Ended June 30,							Six Months Ended June 30,
In millions		2025			2024				2025			2024
Net gains (losses) recognized during the period on equity and trading securities			$	4		$	(56	)	$	1		$	(58	)
Less:
	Net gains (losses) recognized during the period on equity and trading securities sold during the period			-			1			2			1
Unrealized gains (losses) recognized during the period on equity and trading securities still held at the reporting date			$	4		$	(57	)	$	(1	)	$	(59	)