XML 118 R19.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt Disclosure [Abstract] |
Debt | Note 10: Debt Long-Term Debt The Company's long-term debt consists of note s and debentures including accrued interest as follows:
|  |  | As of December 31, |
| In millions |  | 2013 |  | 2012 |
| 6.400% Senior Notes due 2022 (1) |  | $ | 266 |  | $ | 269 |
| 7.000% Debentures due 2025 |  |  | 56 |  |  | 56 |
| 7.150% Debentures due 2027 |  |  | 100 |  |  | 100 |
| 6.625% Debentures due 2028 |  |  | 141 |  |  | 141 |
| 5.700% Senior Notes due 2034 (2) |  |  | 21 |  |  | 157 |
| Accrued interest |  |  | 8 |  |  | 9 |
|  |  |  | 592 |  |  | 732 |
| Less unamortized discount |  |  | 0 |  |  | 1 |
| Subtotal |  | $ | 592 |  | $ | 731 |
| 14% Surplus Notes due 2033 (3) |  |  | 940 |  |  | 940 |
| Accrued interest |  |  | 170 |  |  | 61 |
| Total |  | $ | 1,702 |  | $ | 1,732 |
| ________________ |  |  |  |  |  |
| (1) - Callable on or after August 15, 2006 at 100.00. |
| (2) - Callable anytime at the greater of 100.00 or the present value of the remaining scheduled |
| payments of principal and interest. |
| (3) - Callable on or after January 15, 2018 and every fifth anniversary thereafter at 100.00. |
As of December 31, 2013, accrued interest on the Company's long-term debt was reported within “Long-term debt” on the Company's consolidated balance sheets. Prior to December 31, 2013, the accrued interest on long-term debt was included in “Other liabilities” on the Company's consolidated balance sheets. The accrued interest on long-term debt has been reclassified in the prior year's financial statements to conform to the current presentation. This reclassification had no impact on total revenues, expenses, assets, liabilities, shareholders' equity, operating cash flows, investing cash flows, or financing cash flows for all periods presented. The Company's long-term debt presented in the preceding table is subject to certain restrictive covenants, none of which significantly restrict the Company's operating activities or dividend-paying ability. As of December 31, 2013 and 2012, the Company was in compliance with all debt covenants as there was no occurrence of any event of default with respect to the above securities. Key events of default include: (i) default in the payment of any interest or principal when it becomes due and payable, (ii) default in the performance, or breach, of any covenant or warranty of MBIA, (iii) in the case of certain long-term debt, MBIA Inc.'s failure to make a payment on certain indebtedness in an amount in excess of $10 million, (iv) in the case of certain series of long-term debt, the Company's default with respect to certain indebtedness that results in the acceleration of certain indebtedness in an amount in excess of $10 million, (v) entry by a court having jurisdiction in the premises of a decree or order for relief in respect of MBIA, or in the case of certain long-term debt, National, in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law, and (v) commencement by MBIA of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law. In connection with the BofA Settlement Agreement in May of 2013, MBIA Insurance Corporation received $136 million principal amount of the 5.70% Senior Notes due 2034 as partial consideration for the settlement. These notes were subsequently transferred to National. On a consolidated basis, receipt of these notes by the Company reduced its outstanding debt. On January 16, 2008, MBIA Insurance Corporation issued $1.0 billion of 14% fixed-to-floating rate surplus notes due January 15, 2033. As of December 31, 2013 and 2012, the par amount outstanding was $940 million. The surplus notes ha d an initial interest rate of 14% until January 15, 2013 and thereafter have an interest rate of three-month LIBOR plus 11.26%. Interest and principal payments on the surplus notes are subject to prior approval by the Superintendent of the NYSDFS. From the January 15, 2013 interest payment to the present, MBIA Insurance Corp oration's requests for approval of the note interest payments have been denied by the NYSDFS. MBIA Insurance Corp oration provided notice to the Fiscal Agent that it has not made a scheduled interest payment. The deferred interest payment will become due on the first business day on or after which MBIA Insurance Corp oration obtains approval to make such payment. No interest will accrue on the deferred interest. The surplus notes were callable at par at the option of MBIA Insurance Corporation on the fifth anniversary of the date of issuance, and are callable at par on January 15, 2018 and every fifth anniversary thereafter and are callable on any other date at par plus a make-whole amount, subject to prior approval by the Superintendent and other restrictions. The cash received from the issuance of surplus notes was used for general business purposes and the deferred debt issuance costs are being amortized over the term of the surplus notes. As of December 31, 2013, MBIA Inc., through its corporate segment, owned $13 million of MBIA Insurance Corporation surplus notes. To date, MBIA Insurance Corporation has r epurchased a total of $47 million par value outstanding of its surplus notes at a weighted average price of $77.08. E xpected principal payments due under c orporate debt and s urplus n otes obligations based on their contractual maturity dates are as follows:
In millions |  | 2014 |  | 2015 |  | 2016 |  | 2017 |  | 2018 |  | Thereafter |  | Total
Corporate debt |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 584 |  | $ | 584
14% Surplus Notes due 2033 (1) |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 940 |  |  | 0 |  |  | 940
Total debt obligations due |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 940 |  | $ | 584 |  | $ | 1,524
__________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) - Callable on or after January 15, 2018 and every fifth anniversary thereafter at 100.00.
Investment Agreement Obligations Obligations under investment agreement contracts are recorded as liabilities on the Company's consolidated balance sheets based upon proceeds received plus unpaid accrued interest at the balance sheet date. Upon the occurrence of certain contractually agreed-upon events, some of these funds may be withdrawn by the investor prior to their contractual maturity dates. All of the investment agreements have been collateralized in accordance with the contractual terms. Additionally, certain investment agreements provide for early termination, including, in some cases, with make-whole payments, upon certain other events including the bankruptcy of MBIA Inc. or the commencement of an insolvency proceeding with respect to MBIA Corp. Investment agreements have been issued with either fixed or floating interest rates in U.S. dollars. As of December 31, 2013, the annual interest rates on these agreements ranged from 0.21% to 7.38% and the weighted average interest rate was 5.10%. As of December 31, 2012, the annual interest rates on these agreements ranged from 0.28% to 7.38% and the weighted average interest rate was 5.04%. Expected principal payments due under these investment agreements in each of the next five years ending December 31 and thereafter, based upon contractual maturity dates, are as follows:
|  |  | Principal |
| In millions |  | Amount |
| Maturity date: |  |  |  |
| 2014 |  | $ | 133 |
| 2015 |  |  | 41 |
| 2016 |  |  | 46 |
| 2017 |  |  | 56 |
| 2018 |  |  | 17 |
| Thereafter |  |  | 484 |
| Total expected principal payments (1) |  | $ | 777 |
| Less discount and other adjustments (2) |  |  | 77 |
| Total |  | $ | 700 |
| ________________ |  |  |
| (1) - Amounts reflect principal due at maturity for investment agreements issued at a discount. |
| (2) - Includes discounts of $84 million on investment agreements, net of accrued interest of $7 million. |
Medium-Term Note Obligations MTN obligations are recorded as liabilities on the Company's balance sheets based upon proceeds received, net of unamortized discounts and premiums, plus unpaid accrued interest at the balance sheet date. Certain The MTNs are measured at fair value in accordance with the accounting guidance for certain hybrid financial instruments, which was adopted on January 1, 2007. MTNs are issued by GFL as part of MBIA's asset/liability products. MTNs have been issued with either fixed or floating interest rates and GFL has issued MTNs in U.S. dollars and foreign currencies. During the year ended December 31, 2013, the Company redeemed $506 million par value outstanding of MTNs issued by the Company's conduit segment at a cost of 99.86% of par value. The Company also repurchased approximately $19 2 million par value outstanding of GFL MTNs issued by the Company's asset/liability segment at a weighted average cost of approximately 91.35% of par value. As of December 31, 2013, the interest ra tes of the MTNs ranged from 0% to 8.93% and the weighte d average interest rate was 2.67%. As of December 31, 2012, the interest rates of the MTNs ranged from 0% to 8.08% and the weighted average interest rate was 2.89%. Expected principal payments due under MTN obligations based on their contractual maturity dates are as follows:
|  |  | Principal |
| In millions |  | Amount |
| Maturity date: |  |  |  |
| 2014 |  | $ | 30 |
| 2015 |  |  | 197 |
| 2016 |  |  | 133 |
| 2017 |  |  | 54 |
| 2018 |  |  | 59 |
| Thereafter |  |  | 1,435 |
| Total expected principal payments (1) |  | $ | 1,908 |
| Less discount and other adjustments (2) |  |  | 481 |
| Total |  | $ | 1,427 |
| ________________ |  |  |
| (1) - Amounts reflect principal due at maturity for notes issued at a discount or premium. |
| (2) - Includes discounts of $417 million, fair value adjustments of $72 million and net of accrued interest of $8 million. |
The Company may buy back and extinguish debt originally issued by either MBIA Inc. or its subsidiaries. Purchase prices are generally negotiated through dealers, similar to buying or selling an asset in the open market. The Company repurchases its debt in an effort to improve its own economic position while also providing liquidity to investors of MBIA debt. In all cases, debt buybacks were executed in response to investor or dealer inquiries. Debt of Consolidated Variable Interest Entities Variable Interest Entity Notes VIE notes are variable interest rate debt instruments that were issued primarily in U.S. dollars by consolidated VIEs within the Company's structured finance and international insurance and conduit segments. VIE notes within the structured finance and international insurance segment consist of debt instruments issued by issuer-sponsored consolidated VIEs collateralized by assets held by those consolidated VIEs. VIE notes related to the conduit segment consist of floating rate MTN obligations issued by a Company-sponsored conduit collateralized by assets held by the conduit. As of December 31, 2013, the interest ra te of the MTN was 1.02%. As of December 31, 2012, the interest rates of the MTNs ranged from 0.55% to 1.71% and the weighted average interest rate was 1.28%. The maturity of VIE notes, by segment, as of December 31, 2013 is presented in the following table:
|  |  | Structured |  |  |  |  |
|  |  | Finance and |  |  |  |  |
|  |  | International |  |  |  |  |
| In millions |  | Insurance |  | Conduits |  | Total (1) |
| Maturity date: |  |  |  |  |  |  |  |  |  |
| 2014 |  | $ | 344 |  | $ | 0 |  | $ | 344 |
| 2015 |  |  | 402 |  |  | 0 |  |  | 402 |
| 2016 |  |  | 297 |  |  | 0 |  |  | 297 |
| 2017 |  |  | 360 |  |  | 0 |  |  | 360 |
| 2018 |  |  | 356 |  |  | 0 |  |  | 356 |
| Thereafter |  |  | 3,398 |  |  | 129 |  |  | 3,527 |
| Total |  | $ | 5,157 |  | $ | 129 |  | $ | 5,286 |
| _______________ |  |  |  |  |  |  |  |  |  |
| (1) - Includes $2.4 billion of VIE notes accounted for at fair value as of December 31, 2013. |
Other Borrowing Arrangements Blue Ridge Secured Loan In connection with the BofA Settlement Agreement in May of 2013, MBIA Insurance Corporation and Blue Ridge entered into the Blue Ridge Secured Loan, pursuant to which Blue Ridge agreed to make revolving loans to MBIA Insurance Corporation in an aggregate amount of up to $500 million. During 2013, MBIA Insurance Corporation borrowed $70 million under this facility. MBIA Insurance Corporation used approximately $72 million of the proceeds from the sale of the C laims against the bankruptcy estates of ResCap to repay all outstanding borrowings plus accrued interest and related expenses under the Blue Ridge Secured Loan. In addition, the Blue Ridge Secured Loan was terminated as a result of the sale of the ResCap Claims since the aggregate proceeds of the sale exceeded the Blue Ridge Secured Loan commitment amount, which was reduced to zero under the terms of the facility. Interest Rate and Fees Borrowings under the Blue Ridge Secured Loan ha d a variable interest rate, at MBIA Insurance Corporation's option based on either: (i) the adjusted LIBOR plus an applicable margin (“LIBOR Loans”), or (ii) the highest between (a) Bank of America's prime rate and (b) the sum of the federal funds effective rate plus 0.5% and (c) the adjusted LIBOR plus 1.00%, plus an applicable margin (“Base Rate Loans”). The applicable margin for the LIBOR Loans and the Base Rate Loans is 7.50% and 6.50%, respectively. With respect to any available but undrawn amounts under the Blue Ridge Secured Loan, MBIA Insurance Corporation was obligated to pay a commitment fee on such undrawn amounts of 2.00% per annum. The amount of the commitment fee and interest expense for the year ended December 31, 2013 was $7 million.

X
- Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration