Puerto Rico exposure eyed as bond insurer MBIA set to post results

MBIA Inc (MBI.N), a bond insurer heavily exposed to fiscally troubled Puerto Rico, will report fourth-quarter earnings after the bell on Monday when investors will look for commentary on potential losses from exposure to the island's debt.

Many investors have shunned the company's shares due to uncertainty over exactly how much of its $4 billion exposure to Puerto Rico's debt is at risk as the U.S. commonwealth negotiates a restructuring deal with creditors.

Mark Palmer, who follows the stock for brokerage firm BTIG, said investors will be waiting for management's conference call on Tuesday morning for updated information on the progress of various restructuring talks.

"What investors are looking for is any sort of inkling from management in terms of what the future direction is," he said.

Palmer said investors would monitor any changes in the company's loss provisions as they try to gauge how management is viewing and preparing for potential risks.



MBIA is tipped to post earnings of 11.5 cents per share in the fourth quarter of 2015, up 15 percent on the same period last year, according to a consensus estimate compiled by Thomson Reuters I/B/E/S.

Puerto Rico's House of Representatives has approved a bill aimed at overhauling the island's power utility PREPA, pushing the agency a step closer to finalizing a deal with creditors to restructure more than $8 billion in debt.



Puerto Rico's officials also proposed a wider restructuring plan at the end of January that would cut bond holders by 45 percent in a move seen as an opening salvo in negotiations with bondholders.

MBIA's shares are trading at a substantial discount to the company's book value. The shares traded up 4.3 percent at $7 on Monday compared to a book value of $24.94 per share. Recent optimism over events in Puerto Rico has pushed the stock up 7.8 percent so far this year.



A conference call is scheduled for Tuesday 8:00 a.m. ET (1300 GMT).



(Reporting by Edward Krudy; Editing by Meredith Mazzilli)

Puerto Rico exposure eyed as bond insurer MBIA set to post results