National Public Finance Guarantee Corporation Takes Legal Action to Lift the PROMESA Stay to Seek the Appointment of a Receiver and Compel a Rate Increase in Accordance with Puerto Rico law and PREPA’s Trust Agreement

Due to the Rejection of the RSA, Debt Savings Are Also Lost

PREPA Payment Default Could Have Been Avoided

PURCHASE, N.Y.–(BUSINESS WIRE)–National Public Finance Guarantee Corporation (“National”), an indirect
subsidiary of MBIA Inc. (NYSE:MBI), today announced that National, along
with the Ad Hoc Group of PREPA bondholders, Assured Guaranty Corp.,
Assured Guaranty Municipal Corp. and Syncora Guarantee Inc. (“the
Creditor Group”), has filed a motion in the U.S. District Court for the
District of Puerto Rico to lift the PROMESA stay to seek to enforce its
right to compel the appointment of an independent receiver in order to
pursue increased rates and to oversee certain operations of the Puerto
Rico Electric Power Authority (“PREPA”).

“As PREPA’s single largest creditor, we worked tirelessly for several
years with all stakeholders on a comprehensive restructuring that the
Oversight Board forced off the table in violation of PROMESA. As a
result of the default precipitated by the Oversight Board’s unlawful
action, we now have little option but to enforce our legal and
contractual rights, and to ensure PREPA sets rates and charges that are
sufficient to meet its financial obligations,” said Bill Fallon, CEO of
National Public Finance Guarantee Corporation. “We cannot allow PREPA to
continue to ignore its obligations under Puerto Rico law and the terms
of our Trust Agreement. Given PREPA’s lengthy history of mismanagement
and cronyism and the inherent conflicts of interest ignored by the
Governor and the Oversight Board, an independent receiver will provide
much-needed protection for PREPA, the citizens of Puerto Rico and its
creditors. It is imperative that the rule of law is recognized and that
the political manipulation of PREPA is halted. We continue to support
the utility’s long-term viability and access to the capital markets.”

Puerto Rico law and the PREPA Trust Agreement require PREPA to set
electricity rates at amounts sufficient to enable PREPA to pay its
debts, which include approximately $8.3 billion of outstanding bond
debt. Accordingly, today’s motion seeks to lift the stay under the
Puerto Rico Oversight, Management, and Economic Stability Act
(“PROMESA”) so that the Creditor Group can enforce their rights under
Puerto Rico law and the Trust Agreement following the payment default by
PREPA earlier this month.

Bondholders holding at least 25 percent in principal amount of the PREPA
bonds outstanding have a statutory right to the appointment of a
receiver following an event of default. National, along with rest of the
Creditor Group, represent almost 70 percent of the outstanding bonds.

In addition, National has filed an amended complaint in its lawsuit
against the Oversight Board in the U.S. District Court for the District
of Puerto Rico, asking the court to award National damages for the
Oversight Board’s unlawful rejection of the RSA.

Forward-Looking Statements

This release 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, including, among other
factors, the possibility that MBIA Inc. or National will experience
increased credit losses or impairments on public finance obligations
issued by state, local and territorial governments and finance
authorities that are experiencing unprecedented fiscal stress; the
possibility that loss reserve estimates are not adequate to cover
potential claims; MBIA Inc.’s or National’s ability to fully implement
their strategic plan; and changes in general economic and competitive
conditions. These and other factors that could affect financial
performance or could cause actual results to differ materially from
estimates contained in or underlying MBIA Inc.’s or National’s
forward-looking statements are discussed under the “Risk Factors”
section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may
be updated or amended in MBIA Inc.’s subsequent filings with the
Securities and Exchange Commission. MBIA Inc. and National caution
readers not to place undue reliance on any such forward-looking
statements, which speak only to their respective dates. National and
MBIA Inc. undertake no obligation to publicly correct or update any
forward-looking statement if it later becomes aware that such result is
not likely to be achieved.

National Public Finance Guarantee Corporation, headquartered in
Purchase, New York is the world’s largest U.S. public finance-only
financial guarantee insurance company, with offices in New York and San
Francisco. Please visit National’s website at www.nationalpfg.com.

Contacts

National Public Finance Guarantee Corporation
Media:
Greg
Diamond, 914-765-3190
or
Fixed-Income Investor Relations:
Kevin
Brown, 914-765-3385
or
MBIA Inc.
Investor and
Media Relations:
Greg Diamond, 914-765-3190