-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vs3T9ICRyiEpIQ1MQHL775C4twRPh3+UrPsS75ae7pInPiM1CElFheXwXIw3zu3N 8NE/CQ5B3WH0o7osJODoQA== 0000950130-95-002649.txt : 19951211 0000950130-95-002649.hdr.sgml : 19951211 ACCESSION NUMBER: 0000950130-95-002649 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19951208 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MBIA INC CENTRAL INDEX KEY: 0000814585 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 061185706 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-64861 FILM NUMBER: 95600491 BUSINESS ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 BUSINESS PHONE: 9142734545 MAIL ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1995 REGISTRATION NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- MBIA INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CONNECTICUT 06-1185706 (STATE OR OTHER (IRS EMPLOYER JURISDICTION OF IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 113 KING STREET ARMONK, NEW YORK 10504 (914) 273-4545 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) LOUIS G. LENZI, ESQ. GENERAL COUNSEL AND CORPORATE SECRETARY MBIA INC. 113 KING STREET ARMONK, NEW YORK 10504 (914) 273-4545 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF AGENT FOR SERVICE) ---------------- COPIES TO: ANDREW L. SOMMER, ESQ. LEE MEYERSON, ESQ. DEBEVOISE & PLIMPTON SIMPSON THACHER & BARTLETT 875 THIRD AVENUE 425 LEXINGTON AVENUE NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10017 ---------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC. As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] ---------------- CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE - ----------------------------------------------------------------------------- % Debentures Due 2025. $75,000,000 100% $75,000,000 $25,863
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Estimated solely for the purpose of determining the registration fee. ---------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to Completion, dated December 8, 1995 PROSPECTUS $75,000,000 MBIA INC. % DEBENTURES DUE , 2025 ------------ INTEREST PAYABLE AND ------------ Interest on the % Debentures due , 2025 (the "Debentures") of MBIA Inc. (the "Company") is payable semi-annually in arrears on and of each year, commencing , 1996. The Debentures will mature on , 2025. The Debentures may not be redeemed prior to maturity by the Company and are not subject to any sinking fund. The Debentures will be represented by one global security registered in the name of a nominee of The Depository Trust Company, as Depositary (the "Depositary"). Beneficial interests in the global security representing the Debentures will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its participants. Except as described herein, Debentures in certificated form will not be issued in exchange for the global security. The Debentures will trade in the Depositary's Same-Day Funds Settlement System until maturity, and secondary market trading activity for the Debentures will therefore settle in immediately available funds. All payments of principal and interest will be made by the Company in immediately available funds. See "Description of Debentures". ------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Price to Underwriting Proceeds to Public(1) Discount(2) Company(1)(3) - -------------------------------------------------------------------------------- Per Debenture............................. % % % - -------------------------------------------------------------------------------- Total..................................... $ $ $
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Plus accrued interest, if any, from , 1995 to the date of delivery. (2) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. See "Underwriting." (3) Before deducting expenses payable by the Company estimated at $ . ------------ The Debentures offered by this Prospectus are offered by the Underwriters, subject to prior sale, withdrawal, cancellation or modification of the offer without notice, to delivery to and acceptance by the Underwriters and to certain further conditions. It is expected that delivery of the Debentures will be made at the offices of Lehman Brothers Inc., New York, New York on or about , 1995. ------------ LEHMAN BROTHERS DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. , 1995 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports and proxy and information statements and other information concerning the Company may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the following regional offices of the Commission: Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661, 14th Floor; Seven World Trade Center, Suite 1300, New York, New York 10048, and at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of such material can be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. The indenture pursuant to which the Debentures will be issued (the "Indenture") provides that the Company must file with the Commission and provide to the trustee under the Indenture and to the registered holders of the Debentures copies of the annual reports and other information, documents, and reports specified in Sections 13 and 15 of the Exchange Act so long as the Debentures are outstanding. 2 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 1994. (2) The Company's Quarterly Report on Form 10-Q for each of the first three calendar quarters of 1995 and a Form 10-Q/A dated November 30, 1995 relating to the quarter ended June 30, 1995. Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Debentures offered hereby shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof. Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or contained in this Prospectus, shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the foregoing documents). Any such request should be directed to: Louis G. Lenzi, Esq., MBIA Inc., 113 King Street, Armonk, New York 10504 (telephone: (914) 273-4545). 3 THE COMPANY MBIA Inc. (the "Company") insures municipal bonds, asset-backed securities and other non-municipal bonds through its wholly-owned subsidiary, MBIA Insurance Corporation ("MBIA Corp."), formerly known as Municipal Bond Investors Assurance Corporation. MBIA Corp. is the successor to the business of Municipal Bond Insurance Association (the "Association"), a consortium of multi-line insurers, which began writing municipal bond insurance in 1974. Effective as of December 31, 1989, the Company purchased Bond Investors Guaranty Insurance Company ("BIG Ins."), another financial guarantee insurance company, through the acquisition of all of the common stock of its parent company, Bond Investors Group, Inc. ("BIG"). Subsequently, MBIA Corp. reinsured the net exposure on the insurance policies previously issued by BIG Ins. and the Company contributed the common stock of BIG to MBIA Corp. On August 21, 1990, the Company changed the name of BIG Ins. to MBIA Insurance Corp. of Illinois ("MBIA Illinois"). Subsequently, BIG was merged into MBIA Illinois. As of September 30, 1995, the total net par amount of outstanding bonds insured by MBIA Corp. and MBIA Illinois was $181.5 billion and the aggregate net insurance in force was $332.7 billion. Financial guarantee insurance provides an unconditional and irrevocable guarantee of the payment of the principal of and interest on insured obligations when due. MBIA Corp. primarily insures obligations sold in the new issue and secondary markets, including those held in unit investment trusts and by mutual funds. It also provides surety bonds for debt service reserve funds. The principal economic value of financial guarantee insurance to the entity offering the obligations is the saving in interest costs resulting from the difference in the market yield between an insured obligation and the same obligation on an uninsured basis. In addition, for complex financings and for obligations of issuers that are not well known by investors, insured obligations receive greater market acceptance than uninsured obligations. All obligations insured by MBIA Corp. (as well as obligations previously insured by MBIA Illinois) are rated AAA by both Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. and Fitch Investors Service, L.P. and Aaa by Moody's Investors Service, Inc., the highest ratings assigned by these rating agencies. MBIA Corp. derives its income from insurance premiums earned over the life of the insured obligations and from investment income earned on assets representing capital, retained earnings, and deferred premium revenues. As of September 30, 1995, the Company's deferred premium revenues were $1,599 million, its shareholders' equity was $2,090 million, and its total investments were $5,946 million and $6,138 million at book value and market value, respectively. As of September 30, 1995, MBIA Corp.'s investment portfolio was $3,520 million and $3,668 million at book value and market value, respectively, and was primarily comprised of high quality fixed income securities with intermediate maturities. In 1990, the Company formed a French company, MBIA Assurance S.A. ("MBIA Assurance"), to assist in writing financial guarantee insurance in the countries of the European Community. MBIA Assurance, which is a subsidiary of MBIA Corp., writes policies insuring public infrastructure financings, asset- backed transactions and certain obligations of financial institutions. As of September 30, 1995, MBIA Corp. and MBIA Assurance had collectively insured 50 transactions. Over the last three years, the Company has undertaken the development of investment management services which capitalize on its capabilities, reputation and marketplace relationships. The Company is delivering these services through a group of subsidiary companies. For the nine months ended September 30, 1995, in the aggregate, these investment management ventures contributed $10 million to revenues. The principal executive offices of the Company are located at 113 King Street, Armonk, New York 10504. The telephone number is (914) 273-4545. 4 CAPITALIZATION The following table sets forth the total capitalization of the Company at September 30, 1995 and such capitalization as adjusted to give effect to the issuance and sale of the Debentures (without giving effect to the payment of expenses).
SEPTEMBER 30, 1995 --------------------------------- ACTUAL AS ADJUSTED -------------- ----------------- (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Long-term debt................................. $ 298,872 $ 373,872 -------------- -------------- Shareholders' equity: Preferred Stock, par value $1.00 per share; authorized shares--10,000,000; issued and outstanding shares--none.................... -- -- Common Stock, par value $1.00 per share; au- thorized shares--200,000,000; issued shares--42,077,387.......................... 42,077 42,077 Additional paid-in capital................... 722,478 722,478 Retained earnings............................ 1,212,628 1,212,628 Cumulative translation adjustment............ 2,609 2,609 Unrealized appreciation of investments, net of taxes of $67,879......................... 125,075 125,075 Treasury shares at cost (248,331 shares)..... (14,583) (14,583) -------------- -------------- Total shareholders' equity................. 2,090,284 2,090,284 -------------- -------------- Total capitalization..................... $2,389,156 $2,464,156 ============== ==============
5 SELECTED CONSOLIDATED FINANCIAL AND STATISTICAL DATA The selected consolidated financial data in the table below for each of the five years in the period ended December 31, 1994 have been derived from audited consolidated financial statements of the Company previously filed with the Commission. The selected consolidated financial data at September 30, 1994 and 1995 and for the nine months ended September 30, 1994 and 1995 are unaudited but in the opinion of management include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The following information should be read in conjunction with the consolidated financial statements and related notes of the Company included, or incorporated by reference, in the Company's periodic reports filed under the Exchange Act that are incorporated by reference herein. See "Incorporation of Certain Documents by Reference."
NINE MONTHS YEARS ENDED DECEMBER 31, ENDED SEPTEMBER 30, ----------------------------------------------------------- ---------------------- 1990 1991 1992 1993 1994 1994 1995 ---------- ---------- ---------- ---------- ---------- ---------- ---------- (UNAUDITED) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) INCOME STATEMENT DATA: Insurance: Gross premiums written. $ 211.4 $ 269.2 $ 368.7 $ 479.3 $ 360.8 $ 274.4 $ 269.2 Net premiums written... 181.5 223.0 336.1 431.8 311.6 235.7 237.0 Premiums earned........ 106.7 132.2 162.9 231.3 218.3 162.9 160.6 Net investment income.. 115.3 131.6 150.5 178.9 193.9 144.2 162.9 Net realized gains (losses).............. (0.2) 2.9 9.8 9.7 10.3 9.7 8.1 Investment management services: Income................. -- 0.6 2.3 4.7 16.2 12.0 13.7 Net realized gains (losses).............. -- -- -- 0.1 (0.7) (0.6) (3.4) Income before income taxes................. 165.3 189.7 244.3 324.0 329.4 248.4 258.3 Net income............. 126.6 144.7 188.7 259.0 260.2 195.7 203.1 PER SHARE DATA: Earnings............... $ 3.33 $ 3.74 $ 4.62 $ 6.10 $ 6.18 $ 4.65 $ 4.82 Dividends: Declared............... 0.48 0.62 0.76 0.94 1.14 0.83 0.965 Paid................... 0.44 0.59 0.72 0.89 1.09 0.78 0.930 Book value............. 24.35 27.58 33.00 38.18 40.96 41.09 49.97 BALANCE SHEET DATA: Investments............ $ 1,724.5 $ 1,961.4 $ 2,528.7 $ 3,544.3 $ 4,866.8 $ 4,683.1 $ 6,138.4 Total assets........... 2,158.8 2,438.5 3,049.2 4,106.3 5,456.4 5,264.0 6,758.1 Deferred premium revenue............... 902.1 1,018.6 1,196.2 1,402.8 1,512.2 1,488.5 1,598.6 Loss and loss adjustment expense reserves.............. 5.0 21.2 25.5 33.7 40.1 38.8 45.2 Long-term debt......... 200.0 198.7 298.6 298.7 298.8 298.8 298.9 Shareholders' equity... 931.7 1,063.3 1,382.1 1,596.4 1,704.7 1,714.2 2,090.3 SELECTED FINANCIAL RATIOS: GAAP Basis(1)(3): Loss ratio............. 4.7% 13.0% 3.4% 3.4% 3.7% 3.5% 5.0% Expense ratio.......... 33.7% 30.1% 32.0% 27.4% 28.8% 28.7% 28.2% Combined ratio......... 38.4% 43.1% 35.4% 30.8% 32.5% 32.2% 33.2% SAP Basis(2)(3): Loss ratio............. -- 12.7% 2.4% (3.5%) 9.8% 13.1% (0.4%) Expense ratio.......... 23.4% 20.4% 18.3% 17.6% 22.9% 22.0% 18.8% Combined ratio......... 23.4% 33.1% 20.7% 14.1% 32.7% 35.1% 18.4% OTHER FINANCIAL DATA: Net par amount outstanding........... $ 75,979.2 $ 90,042.9 $112,483.0 $141,386.8 $164,317.9 $159,558.7 $181,481.0 Net debt service outstanding........... 157,706.5 184,604.3 223,056.1 266,784.3 304,501.6 295,227.2 332,741.1
- ------- (1) The GAAP loss ratio is the provision for losses and loss adjustment expenses divided by net premiums earned, and the GAAP expense ratio is underwriting expenses (adjusted for deferred policy acquisition costs) and operating expenses (excluding interest expense) divided by net premiums earned, in each case calculated in accordance with generally accepted accounting principles. The combined ratio is the total of the loss and expense ratios (see Note 2 to the Consolidated Financial Statements of MBIA Inc. and Subsidiaries). (2) The SAP loss ratio is the provision for losses and loss adjustment expenses divided by net premiums earned, and the SAP expense ratio is underwriting expenses divided by net premiums written, in each case calculated in accordance with statutory accounting practices. The combined ratio is the total of the loss and expense ratios. (3) For a discussion of the principal differences between GAAP and SAP accounting, see Note 3 to the Consolidated Financial Statements of MBIA Inc. and Subsidiaries. 6 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges for the Company for the periods indicated. Earnings represent consolidated earnings before income taxes and fixed charges. Fixed charges consist of interest and that portion of rental expense deemed representative of the interest factor for such rental expense. The Company had no capitalized interest for the periods presented.
NINE MONTHS ENDED YEARS ENDED DECEMBER 31, SEPTEMBER 30, ------------------------ ------------- 1990 1991 1992 1993 1994 1994 1995 ---- ---- ---- ---- ---- ------ ------ Ratio of earnings to fixed charges(1).... 10.6 11.2 12.9 13.0 13.1 13.3 13.1
- -------- (1) Fixed charges do not include the amount of fixed charges associated with obligations insured by MBIA Corp. USE OF PROCEEDS The net proceeds to the Company from the sale of the Debentures will be used to provide additional capital for the future needs of the Company and MBIA Corp. and for general corporate purposes. DESCRIPTION OF DEBENTURES The Debentures offered hereby will represent direct unsecured obligations of the Company and will be issued under an Indenture, dated as of August 1, 1990, between the Company and The First National Bank of Chicago, as Trustee (the "Trustee"). The Debentures will be unsecured and unsubordinated obligations of the Company and will rank equally and ratably with other unsecured and unsubordinated obligations of the Company. The Debentures offered hereby will be limited to $75,000,000 aggregate principal amount and will mature on December , 2025. Each Debenture will bear interest at the rate of % per annum from , 1995 or from the most recent interest payment date to which interest has been paid or provided for, payable semi-annually on and of each year, commencing , 1996 to the person in whose name such Debenture is registered at the close of business on or , as the case may be, next preceding such interest payment date. The Debentures will not be redeemable at any time prior to maturity. The Debentures do not provide for any sinking fund. The Debentures will be subject to defeasance and covenant defeasance as provided in Article Thirteen of the Indenture. The following statements are subject to the detailed provisions of the Indenture, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. References in parentheses refer to sections of the Indenture. For the definition of certain capitalized terms used in this Description of Debentures, see "Definitions" below. Wherever particular provisions of the Indenture are referred to, such provisions are incorporated by reference as a part of the statements made and the statements are qualified in their entirety by such reference. 7 CERTAIN COVENANTS OF THE COMPANY LIMITATIONS ON LIENS Under the Indenture, so long as Debentures are outstanding, the Company will not, and will not permit any Subsidiary to, directly or indirectly, create, issue, assume, incur or guarantee any indebtedness for borrowed money which is secured by a Mortgage of any nature on any of the present or future capital stock of any Restricted Subsidiary unless the Debentures then outstanding shall be secured equally and ratably with, or prior to, such other secured debt so long as it is outstanding. (Section 3.6) LIMITATIONS ON DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES Under the Indenture, so long as Debentures are outstanding, the Company will not, and will not permit any Subsidiary to, sell, transfer or otherwise dispose of any shares of capital stock of any Restricted Subsidiary except for (i) a sale, transfer or other disposition of any capital stock of any Restricted Subsidiary to a wholly-owned Subsidiary of the Company or such Subsidiary; (ii) a sale, transfer or other disposition of the entire capital stock of any Restricted Subsidiary for at least fair value (as determined by the Board of Directors of the Company acting in good faith); or (iii) a sale, transfer or other disposition of the capital stock of any Restricted Subsidiary for at least fair value (as determined by the Board of Directors of the Company acting in good faith) if, after giving effect thereto, the Company and its Subsidiaries would own more than 80% of the issued and outstanding Voting Stock of such Restricted Subsidiary. (Section 3.7) CONSOLIDATION, MERGER, SALE OR CONVEYANCE Under the Indenture, so long as Debentures are outstanding, the Company will not consolidate with or merge with or into any other corporation or convey, transfer or lease its properties or assets as an entirety or substantially as an entirety to any person, unless (i) the successor or purchaser is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia; (ii) such successor or purchaser shall expressly assume, by supplemental indenture satisfactory in form to the Trustee, the due and punctual payment of the principal of, premium, if any, and interest on all the Debentures and the performance and observance of every covenant and condition of the Company under the Indenture; and (iii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing under the Indenture. (Section 9.1) EVENTS OF DEFAULT Any one of the following events will constitute an Event of Default with regard to Debentures under the Indenture: (i) default continued for 30 days in payment of any instalment of interest on any of the Debentures when due; (ii) default in payment of all or any part of the principal of the Debentures when due and payable either at maturity, upon any redemption, by declaration or otherwise; (iii) default continued for 60 days after notice of such default in performance of any covenant or warranty of the Indenture by the Company in respect of the Debentures; (iv) certain events of default with respect to indebtedness of the Company (other than the Debentures or non-recourse obligations of the Company) in an aggregate principal amount in excess of $10,000,000 which default shall consist of the failure to make any payment at maturity or shall have resulted in the acceleration of the maturity of such indebtedness; or (v) certain events of bankruptcy, insolvency, or reorganization of the Company or any Restricted Subsidiary. (Section 5.1) The Company is required to file with the Trustee annually a written statement as to the fulfillment of certain of its obligations under the Indenture. (Section 3.5) The Indenture provides that the Trustee may withhold notice to 8 the holders of Debentures of any default (except in payment of principal of or premium, if any, or interest on the Debentures) if the Trustee considers it in the interest of the holders of the Debentures to do so. (Section 5.11) The Indenture provides that (a) if an Event of Default described in clause (i) or (ii) above shall have occurred and be continuing with regard to the Debentures, either the Trustee or the holders of 25% in aggregate principal amount of the Debentures then outstanding may declare the principal of such Debentures and interest accrued thereon, if any, to be due and payable immediately and (b) if an Event of Default described in clause (iii), (iv) or (v) above shall have occurred and be continuing, either the Trustee or the holders of 25% in aggregate principal amount of all Debt Securities (or in the case of an Event of Default described in clause (iii) above, all series affected by such Event of Default) then outstanding (voting as a single class) may declare the principal of all Debt Securities (in the case of clause (iii) above, limited to all series affected) then outstanding and interest accrued thereon, if any, to be due and payable immediately. Upon certain conditions, such declaration by the holders of Debt Securities of any series may be annulled and past defaults which have been cured may be waived by (a) with respect to clauses (i) or (ii) the holders of a majority in aggregate principal amount of Debt Securities of such series (each such series voting as a separate class) then outstanding and (b) with respect to clauses (iii), (iv) or (v) above, the holders of a majority in aggregate principal amount of the Debt Securities of all series (in the case of clause (iii) above, limited to all series affected by such default) then outstanding (voting as a single class). (Section 5.1) Prior to a declaration of acceleration of maturity of the Debt Securities of any series, the holders of a majority in aggregate principal amount of the Debt Securities of each series voting separately or all series voting as a single class, depending on the nature of the Event of Default, may waive any Event of Default, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Debt Securities of such series or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the holder of each Debt Security of such series affected. (Section 5.10) Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the holders of Debentures, unless such holders shall have offered the Trustee reasonable indemnity. (Section 6.2) Subject to such provision for indemnification, the holders of a majority in aggregate principal amount of the Debentures shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee. (Section 5.9) DEFEASANCE AND COVENANT DEFEASANCE The Indenture provides that, subject to certain conditions, the Company may elect either (i) to be discharged from any and all obligations with respect to the Debentures (except for the obligations to register the transfer or exchange of the Debentures, to replace temporary or mutilated, defaced, destroyed, lost or stolen Debentures, to maintain an office or agency for the payment of principal and interest in respect of the Debentures, to appoint a paying agent and, if the Company elects to act as the paying agent, to hold moneys for such payment in trust) ("Defeasance") or (ii) to be released from its obligations with respect to the Debentures under Sections 3.6 and 3.7 of the Indenture (being the sections of the Indenture captioned "Limitations on Liens" and "Limitations on Disposition of Stock of Restricted Subsidiaries" -- see "Certain Covenants of the Company") ("Covenant Defeasance"), upon the deposit with the Trustee (or another qualifying trustee) irrevocably in trust for such purpose, of money and/or United States government obligations in an amount which, in the opinion of a nationally recognized firm of independent public accountants delivered to such trustee, would be sufficient to pay the principal of and premium, if any, and interest on the Debentures on the scheduled due dates therefor. (Sections 13.1 through 13.4) 9 The Indenture provides that, to effect Defeasance or Covenant Defeasance, the Company must deliver to the Trustee an opinion of counsel to the effect that Defeasance or Covenant Defeasance, as the case may be, will not cause the holders of the Debentures to recognize income, gain or loss for federal income tax purposes. In addition, in the case of Defeasance, such opinion of counsel must state that a private letter ruling or a revenue ruling to the same effect has been issued by the United States Internal Revenue Service or state that since the date of the Indenture there has been a change in the applicable federal income tax law to the same effect. (Sections 13.3 and 13.4) MODIFICATION AND WAIVER The Indenture provides that the Company may enter into a supplemental indenture or indentures for the purpose of adding to, changing or eliminating any of the provisions of the Indenture or of any supplemental indentures or of modifying the rights of the holders of Debt Securities issued thereunder if approved in writing signed by the holders of not less than a majority in aggregate principal amount of all outstanding Debt Securities affected thereby voting as one class; provided that the consent of each holder of Debentures affected thereby is required for any modification or alteration which (i) extends the final maturity of any Debentures, or reduces the principal amount thereof, or reduces the rate or extends the time of payment of interest thereon, or reduces any amount payable on redemption thereof or impairs or affects the right of any holder of Debentures to institute suit for the payment thereof, or (ii) reduces the percentage in aggregate principal amount, the consent of the holders of which is required for any such supplemental indenture. (Section 8.2) The holders of at least a majority in aggregate principal amount of the outstanding Debt Securities of all series (including the Debentures) voting as one class may waive compliance by the Company with certain covenants contained in the Indenture (being the Sections of the Indenture captioned "Limitations on Liens;" "Limitations on Disposition of Stock of Restricted Subsidiaries;" "Corporate Existence"). (Section 3.9) BOOK-ENTRY, DELIVERY AND FORM The Debentures may be issued in the form of one or more fully registered global securities (each, a "Registered Global Security"), which will be deposited with, or on behalf of the depositary named in this Prospectus and registered in the name of such depositary or its nominee. (Section 2.12) Except as set forth below, Debentures will be available for purchase in book- entry form only in denominations of $1,000 and integral multiples thereof. Upon issuance, all Debentures will be represented by one fully registered global security (the "Registered Global Security"). The Registered Global Security will be deposited with, or on behalf of, The Depository Trust Company, as Depositary, and registered in the name of the Depositary or a nominee thereof. The Registered Global Security may be transferred, in whole but not in part, by the Depositary to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary selected or approved by the Company or to a nominee of such successor Depositary. The Depositary has advised the Company as follows: The Depositary is a limited-purpose trust company organized under the Banking Law of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. The Depositary was created to hold securities of its participants and to facilitate the clearance and settlement of transactions among its participants in such securities through electronic computerized book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). The Depositary is owned by a number of its Direct Participants 10 and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the Depositary book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by the Depositary only through Direct Participants. The rules applicable to the Depositary and its participants are on file with the Commission. Ownership of beneficial interests in the Debentures will be limited to persons that have accounts with the Depositary ("Agent Members") or persons that may hold interests through Agent Members. The Depositary has advised the Company that upon the issuance of the Registered Global Security representing the Debentures, the Depositary will credit, on its book-entry registration and transfer system, the Agent Members' accounts with the respective principal amounts of the Debentures beneficially owned by such Agent Members. Ownership of beneficial interests in such Registered Global Security will be shown on, and the transfer of such ownership interests will be effected only through, records maintained by the Depositary (with respect to interests of Agent Members) and on the records of Agent Members (with respect to interests of persons holding through Agent Members). The laws of some states may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, transfer or pledge beneficial interests in the Registered Global Security. So long as the Depositary, or its nominee, is the registered owner of the Registered Global Security, the Depositary or its nominee, as the case may be, will be considered the sole owner or Holder of the Debentures represented by such Registered Global Security for all purposes under the Indenture. Except as provided below, owners of beneficial interests in the Registered Global Security will not be entitled to have the Debentures represented by such Registered Global Security registered in their names, will not receive or be entitled to receive physical delivery of the Debentures in definitive form and will not be considered the owners or Holders thereof under the Indenture. Accordingly, each Person owning a beneficial interest in the Registered Global Security must rely on the procedures of the Depositary and, if such Person is not an Agent Member, on the procedures of the Agent Member through which such Person owns its interest, to exercise any rights of a Holder under the Indenture. The Company understands that under existing industry practices, in the event that the Company requests any action of Holders or that an owner of a beneficial interest in the Registered Global Security desires to give or take any action which a Holder is entitled to give or take under the Indenture, the Depositary would authorize the Agent Members holding the relevant beneficial interests to give or take such action, and such Agent Members would authorize beneficial owners owning through such Agent Members to give or take such action or would otherwise act upon the instructions of beneficial owners holding through them. Payment of principal of, and interest on, Debentures registered in the name of the Depositary or its nominee will be made by wire transfer of immediately available funds on the date such payment is due to the Depositary or its nominee, as the case may be, as the Holder of the Registered Global Security representing such Debentures. None of the Company, the Trustee or any other agent of the Company or agent of the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests or for supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that the Depositary, upon receipt of any payment of principal or interest in respect of the Registered Global Security, will credit the accounts of the Agent Members with payment in amounts proportionate to their respective beneficial interests in such Registered Global Security as shown on the records of the Depositary. The Company also expects that payments by Agent Members to owners of beneficial interests in the Registered Global Security will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Agent Members. 11 If (x) the Depositary notifies the Company that it is at any time unwilling or unable to continue as Depositary or the Depositary ceases to be a clearing agency registered under the Exchange Act, and a successor Depositary is not appointed by the Company within 90 days after the Company receives such notice, or becomes aware of such condition, as the case may be, or (y) the Company executes and delivers to the Trustee an Officers' Certificate to the effect that the Registered Global Security shall be transferable and exchangeable, the Registered Global Security will be transferable or exchangeable for Debentures in definitive form of an equal aggregate principal amount without coupons and in denominations of $1,000 and integral multiples thereof. Such definitive Debentures shall be registered in such name or names as the Depositary shall instruct the Trustee. It is expected that such instructions may be based upon directions received by the Depositary from Agent Members with respect to ownership of beneficial interests in the Registered Global Security. SAME-DAY SETTLEMENT AND PAYMENT Settlement for the Debentures will be made by the Underwriters in immediately available funds. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, the Debentures will trade in the Same-Day Funds Settlement System maintained by the Depositary until maturity, and secondary market trading activity in the Debentures will therefore be required by the Depositary to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Debentures. CONCERNING THE TRUSTEE The Trustee, The First National Bank of Chicago, performs services for the Company in the ordinary course of business. DEFINITIONS The covenants and other provisions relating to the Debt Securities (including the Debentures) are to be read in conjunction with the definitions contained in the Indenture, certain of which are substantially to the following effect: "Debt Securities" means all unsecured debt securities, notes or other evidences of indebtedness issued in one or more series that the Company may issue from time to time in accordance with the terms of the Indenture. "Mortgage" means any mortgage, pledge, lien, security interest or other encumbrance. "Restricted Subsidiary" means MBIA Corp. and any successor to all or substantially all of its business, provided that such successor is a Subsidiary. "Subsidiary" means a corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. "Voting Stock" means, with respect to any Subsidiary, stock of any class or classes (or equivalent interests), if the holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the absence of contingencies, entitled to vote for the election of the directors (or persons performing similar functions) of such corporation, even though the right so to vote has been suspended by the happening of such a contingency. 12 UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement (which is filed as an exhibit to the Registration Statement of which this Prospectus is a part), the Company has agreed to sell to each of the Underwriters named below, and each of the Underwriters has severally agreed to purchase from the Company, the principal amount of the Debentures set forth opposite its name below.
PRINCIPAL AMOUNT UNDERWRITERS OF DEBENTURES ------------ ---------------- Lehman Brothers Inc. ...................................... $ Donaldson, Lufkin & Jenrette Securities Corporation........ Goldman, Sachs & Co. ...................................... Merrill Lynch, Pierce, Fenner & Smith Incorporated.......................................... ----------- Total.................................................. $75,000,000 ===========
Under the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all of the Debentures if any are taken. The Company has been advised that the Underwriters propose initially to offer the Debentures to the public at the public offering price set forth on the cover page of this Prospectus, and to certain dealers at such price less a concession not in excess of % of the principal amount. The Underwriters may allow, and such dealers may reallow, a concession not in excess of % of the principal amount to certain other dealers. After the initial public offering, the public offering price and such concessions may be changed. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the Underwriters may be required to make in respect thereof. The Company does not intend to list the Debentures on any securities exchange or on the NASDAQ National Market. The Company has been advised by each Underwriter that it presently intends to make a market in the Debentures; however, the Underwriters are not obliged to do so. Any such market-making activity may be discontinued at any time, for any reason, without notice. If each Underwriter ceases to act as a market maker for the Debentures for any reason, there can be no assurance that another firm or person will make a market in the Debentures. Accordingly, there can be no assurance that an active market for the Debentures will develop or, if a market does develop, at what prices the Debentures will trade. Certain of the Underwriters have provided from time to time, and expect to provide in the future, investment banking services to the Company and its affiliates, for which such Underwriters have received and will receive customary fees and commissions. LEGAL OPINIONS The validity of the Debentures offered hereby is being passed upon for the Company by Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022, and for the Underwriters by Simpson Thacher & Bartlett (a partnership which includes professional corporations), 425 Lexington Avenue, New York, New York 10017. Such counsel may rely, as to matters of Connecticut law, upon the opinion of Day, Berry & Howard, CityPlace, Hartford, Connecticut 06103, Connecticut counsel for the Company. Simpson Thacher & Bartlett renders services to the Company on a regular basis. 13 EXPERTS The consolidated financial statements and the related consolidated financial statement schedules of the Company appearing or incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, have been audited by Coopers & Lybrand L.L.P., independent accountants, as set forth in their reports thereon dated February 1, 1995 incorporated by reference or included therein and incorporated herein by reference. Such consolidated financial statements and financial statement schedules are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. 14 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR- MATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PRO- SPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. ----------------- TABLE OF CONTENTS
Page ---- Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 3 The Company................................................................ 4 Capitalization............................................................. 5 Selected Consolidated Financial and Statistical Data....................... 6 Ratio of Earnings to Fixed Charges......................................... 7 Use of Proceeds............................................................ 7 Description of Debentures.................................................. 7 Underwriting............................................................... 13 Legal Opinions............................................................. 13 Experts.................................................................... 14
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $75,000,000 MBIA INC. % DEBENTURES DUE , 2025 ----------------- PROSPECTUS , 1995 ----------------- LEHMAN BROTHERS DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated expenses in connection with the issuance and distribution of the Debentures being registered, other than underwriting discounts and commissions: Registration Fee.................................................. $25,863 Trustee Fees...................................................... * Printing.......................................................... * Accounting Fees................................................... * Legal Fees........................................................ * Rating Agency Fees................................................ * Blue Sky Fees and Expenses........................................ 20,000 Miscellaneous..................................................... * ------- TOTAL......................................................... $ * =======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS. Section 33-320a of the Stock Corporation Act of the State of Connecticut provides that a corporation shall indemnify a director or officer against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred by him, including attorneys' fees, for actions brought or threatened to be brought against him in his capacity as a director or officer, other than actions brought by or in the right of the corporation, when it is determined by certain disinterested parties that he acted in a manner reasonably believed to be in the corporation's best interest. In any criminal action or proceeding, it also must be determined that the director or officer had no reason to believe that his conduct was unlawful. The director or officer must also be indemnified when he is successful on the merits in the defense of a proceeding or in circumstances where a court determines that he is fairly and reasonably entitled to be indemnified, and the court approves the amount. In connection with shareholder derivative suits, the director or officer may not be indemnified unless he is finally adjudged not to have breached his duty to the corporation or a court has determined that he is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. The statute provides that the indemnification provided thereby is exclusive and cannot be reduced or expanded by charter, by-law or agreement, although a corporation may procure insurance providing greater indemnification. The Company has purchased insurance providing officers and directors of the Company (and their heirs and other legal representatives) coverage against certain liabilities arising from any negligent act, error, omission or breach of duty claimed against them solely by reason of their being such officers and directors, and providing coverage for the Company against its obligation to provide indemnification as required by the above-described statute. The insurance policy has a $50 million aggregate policy limit for any loss or losses during the policy year. The Underwriting Agreement filed as Exhibit 1.01 hereto provides for indemnification of the Company's officers and directors by the Underwriters under certain circumstances. The Amended and Restated Shareholders' Agreement among the Company and its Founding Shareholders provides for indemnification of the shareholders that are parties thereto under certain circumstances (filed as Exhibit 10.30 to the Company's Registration Statement on Form S-1 (Registration No. 33-14474)). II-1 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (A) EXHIBITS 1. Underwriting Agreement. 1.01. Form of Underwriting Agreement. 4. Instruments Defining the Rights of Security Holders. 4.01. Indenture, dated as of August 1, 1990, between the Company and The First National Bank of Chicago, as trustee, incorporated by ref- erence to Exhibit 4.01 to the Company's Registration Statement on Form S-3 (Registration No. 33-33937). 5. Opinions as to Validity. 5.01. Opinion of Debevoise & Plimpton.* 5.02. Opinion of Day, Berry & Howard.* 12. Statement Re Computation of Ratios. 12.01. Computation of Ratios of Earnings to Fixed Charges. 23. Consents of Experts and Counsel. 23.01. Consent of Coopers & Lybrand L.L.P. 23.02. Consent of Debevoise & Plimpton (contained in Exhibit 5.01).* 23.03. Consent of Day, Berry & Howard (contained in Exhibit 5.02).* 24. Powers of Attorney. 24.01. Powers of Attorney. 25. Statement of Eligibility of Trustee. 25.01. Statement of Eligibility on Form T-1 under the Trust In- denture Act of 1939, as amended, of The First National Bank of Chicago.
- -------- * To be filed by amendment. ITEM 17. UNDERTAKINGS. (A) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (B) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (C) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing II-2 provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in said Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN ARMONK, NEW YORK, ON DECEMBER 8, 1995. MBIA Inc. (Registrant) /s/ David H. Elliott By __________________________________ DAVID H. ELLIOTT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ David H. Elliott Chairman, Chief Executive December 8, 1995 - ------------------------------------------- Officer and Director DAVID H. ELLIOTT (principal executive officer) /s/ Richard L. Weill President and Director December 8, 1995 - ------------------------------------------- RICHARD L. WEILL /s/ Julliette S. Tehrani Senior Vice President and December 8, 1995 - ------------------------------------------- Chief Financial Officer JULLIETTE S. TEHRANI (principal financial officer) /s/ Elizabeth B. Sullivan Vice President and December 8, 1995 - ------------------------------------------- Controller (principal ELIZABETH B. SULLIVAN accounting officer) /s/ William O. Bailey* Director December 8, 1995 - ------------------------------------------- WILLIAM O. BAILEY /s/ Joseph W. Brown, Jr.* Director December 8, 1995 - ------------------------------------------- JOSEPH W. BROWN, JR. /s/ David C. Clapp* Director December 8, 1995 - ------------------------------------------- DAVID C. CLAPP /s/ Claire L. Gaudiani* Director December 8, 1995 - ------------------------------------------- CLAIRE L. GAUDIANI
II-4
SIGNATURE TITLE DATE --------- ----- ---- /s/ William H. Gray, III* Director December 8, 1995 - ------------------------------------------- WILLIAM H. GRAY, III /s/ Freda S. Johnson* Director December 8, 1995 - ------------------------------------------- FREDA S. JOHNSON /s/ Daniel P. Kearney* Director December 8, 1995 - ------------------------------------------- DANIEL P. KEARNEY /s/ James A. Lebenthal* Director December 8, 1995 - ------------------------------------------- JAMES A. LEBENTHAL /s/ Robert B. Nicholas* Director December 8, 1995 - ------------------------------------------- ROBERT B. NICHOLAS /s/ Pierre-Henri Richard* Director December 8, 1995 - ------------------------------------------- PIERRE-HENRI RICHARD /s/ John A. Rolls* Director December 8, 1995 - ------------------------------------------- JOHN A. ROLLS /s/ Louis G. Lenzi *By _______________________________________ LOUIS G. LENZI ATTORNEY-IN-FACT
/s/ Louis G. Lenzi *By _________________________________ LOUIS G. LENZI ATTORNEY-IN-FACT II-5 EXHIBIT INDEX
EXHIBITS DESCRIPTION PAGE NO. 1. Underwriting Agreement. 1.01. Form of Underwriting Agreement. 4. Instruments Defining the Rights of Security Holders. 4.01. Indenture, dated as of August 1, 1990, between the Company and The First National Bank of Chicago, as trustee, incorporated by ref- erence to Exhibit 4.01 to the Company's Registration Statement on Form S-3 (Registration No. 33-33937). 5. Opinions as to Validity. 5.01. Opinion of Debevoise & Plimpton.* 5.02. Opinion of Day, Berry & Howard.* 12. Statement Re Computation of Ratios. 12.01. Computation of Ratios of Earnings to Fixed Charges. 23. Consents of Experts and Counsel. 23.01. Consent of Coopers & Lybrand L.L.P. 23.02. Consent of Debevoise & Plimpton (contained in Exhibit 5.01).* 23.03. Consent of Day, Berry & Howard (contained in Exhibit 5.02).* 24. Powers of Attorney. 24.01. Powers of Attorney. 25. Statement of Eligibility of Trustee. 25.01. Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The First National Bank of Chicago.
- -------- *To be filed by amendment. EX-1.01 2 FORM OF UNDERWRITING AGREEMENT EXHIBIT 1 $75,000,000 MBIA INC. ____% DEBENTURES DUE 2025 UNDERWRITING AGREEMENT ________ __, 1995 ________ __, 1995 Lehman Brothers Inc. Donaldson, Lufkin & Jenrette Securities Corporation Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated c/o Lehman Brothers Inc. 3 World Financial Center New York, New York 10285-0090 Dear Sirs: MBIA Inc., a Connecticut corporation (the "Company"), proposes to issue and sell to the several Underwriters $75,000,000 principal amount of its ____% Debentures Due 2025 (the "Securities"). The Securities are to be issued pursuant to the provisions of an Indenture to be dated as of August 1, 1990 (hereinafter called the Indenture) between the Company and The First National Bank of Chicago, as Trustee. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement including a prospectus relating to the Securities. The registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter referred to as the Registration Statement; the prospectus in the form first used to confirm sales of Securities is hereinafter referred to as the Prospectus. I. The Company hereby agrees to sell to the several Underwriters named in Schedule I hereto, and the Underwriters, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agree, severally and not jointly, to purchase from the Company the respective principal amounts of Securities set forth in Schedule I hereto opposite their names at ____% of their principal amount -- the purchase price -- plus accrued interest, if any, from ___________ __, 1995 to the date of payment and delivery. 2 II. The Company is advised by you that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Company is further advised by you that the Securities are to be offered to the public initially at ____% of their principal amount -- the public offering price -- plus accrued interest, if any, and to certain dealers selected by you at a price that represents a concession not in excess of ____% of their principal amount under the public offering price, and that any Underwriter may allow, and such dealers may reallow, a concession, not in excess of ____% of their principal amount, to any Underwriter or to certain other dealers. III. Payment for the Securities shall be made by wire transfer, payable in same-day federal funds to an account specified by the Company, at 10:00 A.M., local time, on ________ __, 1995, or at such other time on the same or such other date, not later than ________ __, 1995, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the Closing Date and the closing shall occur at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017. Payment for the Securities shall be made against delivery to you for the respective accounts of the several Underwriters of the Securities registered in such names and in such denominations as you shall request in writing not later than two full business days prior to the date of delivery, with any transfer taxes payable in connection with the transfer of the Securities to the Underwriters duly paid. IV. The obligations of the Company and the several obligations of the Underwriters hereunder are subject to the condition that the Registration Statement shall have become effective not later than the date hereof. The several obligations of the Underwriters hereunder are subject to the following further conditions: (a) (i) no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; (ii) subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have occurred any downgrading, nor shall any notice have been given of (A) any intended or potential downgrading or (B) any review or possible change that does not indicate the direction of a possible change, in the rating 3 accorded any of the Company's securities by any "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; (iii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Registration Statement, that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus; and (iv) you shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in clauses (i) and (ii) above, to the effect that the representations and warranties of the Company contained herein are true and correct as of the Closing Date and to the effect that there has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Registration Statement. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. (b) You shall have received on the Closing Date an opinion of Louis G. Lenzi, Esq., General Counsel of the Company, dated the Closing Date, to the effect that (i) (A) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Connecticut, with requisite corporate power and authority to own, lease and operate its properties and conduct its business as described in the Prospectus, and (B) the Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification and where the failure to so qualify would have a material adverse effect on the business, operation or financial condition of the Company and its subsidiaries taken as a whole; (ii) (A) MBIA Insurance Corporation ("MBIA Corp.") has been duly incorporated, is validly existing as an insurance company in good standing under the laws of the State of New York and (B) is duly licensed and in good standing to conduct its municipal bond insurance business in each state in the United States and the District of Columbia; (iii) each other subsidiary of the Company has been duly incorporated, is validly existing and in good standing under the laws of the 4 jurisdiction of its incorporation and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification and where the failure to so qualify would have a material adverse effect on the business, operation or financial condition of the Company and its subsidiaries taken as a whole; (iv) the Indenture has been duly authorized, executed and delivered by the Company, is a valid and binding agreement of the Company and has been duly qualified under the Trust Indenture Act of 1939, as amended; (v) the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be valid and binding obligations of the Company and will be entitled to the benefits of the Indenture; (vi) this Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, except as rights to indemnity and contribution hereunder may be limited under applicable law; (vii) the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Securities and the Indenture will not contravene any provision of United States Federal law or the corporate laws of the State of Connecticut or the State of New York or the certificate of incorporation or by-laws of the Company or any of its subsidiaries or any material agreement or other material instrument binding upon the Company or any of its subsidiaries, and no consent, approval or authorization of any governmental body or agency is required under United States Federal law or the corporate laws of the State of Connecticut or the State of New York for the performance by the Company of its obligations under this Agreement, the Securities and the Indenture, except such as are specified and have been obtained; provided that such counsel need express no opinion as to state securities or Blue Sky laws or as to the accuracy or completeness of the Registration Statement or the Prospectus; (viii) the statements in the Prospectus under "Description of Debentures" and in the Registration Statement in Item 15, insofar as such statements constitute a summary of the laws, regulations or documents referred to therein, constitute a fair and accurate summary, in all material respects, of such laws, regulations and documents; (ix) after due inquiry, such counsel does not know of any legal or governmental proceeding pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company 5 or any of its subsidiaries is subject that is required to be described in the Registration Statement or the Prospectus and is not so described or of any contract or other document that is required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed as required; and (x) such counsel (1) is of the opinion that the Registration Statement and the Prospectus and any supplements or amendments thereto (except for financial statements and other financial and statistical information contained therein, as to which such counsel need not express any opinion) comply as to form in all material respects with the Securities Act and the rules and regulations of the Commission thereunder and (2) believes that (except for financial statements and other financial and statistical information contained therein, as to which such counsel need not express any belief, and except for that part of the registration Statement that constitutes the Form T-1 hereinafter referred to) the Registration Statement and the prospectus included therein at the time the Registration Statement became effective did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus, as amended or supplemented, if applicable, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (c) You shall have received on the Closing Date an opinion of Debevoise & Plimpton, counsel for the Company, dated the Closing Date, covering the matters referred to in subparagraphs (i)(A), (ii)(A), (iv), (v), (vi), (viii) (but only as to the statements in the Prospectus under "Description of Debentures") and (x) of paragraph (b) above. (d) You shall have received on the Closing Date an opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated the Closing Date, covering the matters referred to in subparagraphs (iv), (v), (vi), (viii) (but only as to the statements in the Prospectus under "Description of Debentures") and (x) of paragraph (b) above. With respect to subparagraph (x) of paragraph (b) above, Louis G. Lenzi, Esq., Debevoise & Plimpton and Simpson Thacher & Bartlett may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification except as specified. Each of the opinions delivered pursuant to paragraphs (b), (c) and (d) above may rely as to matters of Connecticut law on the opinion of Day, Berry & Howard or of such other local counsel as shall be reasonably satisfactory to you. (e) You shall have received on the date of this Agreement a letter dated such date and also on the Closing Date a letter dated the Closing Date, in each case in form and substance satisfactory to you, from Coopers & Lybrand, independent public 6 accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. V. In further consideration of the agreements of the Underwriters herein contained, the Company covenants as follows: (a) To furnish you, without charge, three signed copies of the Registration Statement including exhibits and to each other Underwriter a conformed copy of the Registration Statement without exhibits and, during the period mentioned in paragraph (c) below, as many copies of the Prospectus and any supplements and amendments thereto as you may reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus, to furnish you a copy of each such proposed amendment or supplement, and to file no such proposed amendment or supplement to which you reasonably object. (c) If, during such period after the first date of the public offering of the Securities as in the opinion of your counsel the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Securities may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request (provided that in no event shall the Company be obligated to -------- qualify to do business in any jurisdiction where it is not so qualified) and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of the Securities for investment under the laws of such jurisdictions as you may designate, as well as all filing fees payable in connection with the review (if any) of the offering of the Securities by the National Association of Securities Dealers, Inc. 7 (e) To make generally available to the Company's security holders as soon as practicable an earnings statement covering the twelve-month period ending ________ __, 1995, that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. VI. The Company represents and warrants to each Underwriter that (i) each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the rules and regulations of the Commission thereunder and (ii) the Registration Statement and Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) will comply in all material respects with the Securities Act and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; except that the foregoing representations and warranties shall not apply to (a) that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939 of The First National Bank of Chicago, Trustee under the Indenture, and (b) statements or omissions in the Registration Statement or the Prospectus or any preliminary prospectus based upon information relating to the Underwriters furnished to the Company in writing by any Underwriter through you expressly for use therein. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each Underwriter and each such controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter or controlling person in connection with investigating or defending or preparing to defend against any such losses, claims, damages or liabilities as such expenses are incurred, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to the Underwriters furnished to the Company in writing by any Underwriter through you expressly for use therein; provided that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of 8 such Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and shall reimburse the Company, such directors, officers or controlling persons promptly upon demand for any legal or other expenses to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (hereinafter called the indemnified party) shall promptly notify the person against whom such indemnity may be sought (hereinafter called the indemnifying party) in writing; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Article VI except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Article VI. The indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or (iii) the indemnifying party has failed to assume the defense of such proceeding and employ counsel reasonably satisfactory to the indemnified party, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Lehman Brothers Inc. in the case of parties indemnified pursuant to the second preceding paragraph and by the Company in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any 9 proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the second or third paragraph of this Article VI is unavailable to an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Underwriters from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and of the Underwriters in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Securities. The relative fault of the Company and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VI were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VI, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not 10 guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Article VI are several in proportion to their respective underwriting percentages and not joint. The indemnity and contribution agreements contained in this Article VI and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Securities. The Underwriters severally confirm that the statements with respect to the public offering of the Securities set forth on the cover page of, and under the caption "Underwriting" in, the Prospectus are correct and constitute the only information furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in the Registration Statement and the Prospectus. VII. This Agreement shall be subject to termination in your absolute discretion, by notice given to the Company, if (a) after the execution and delivery of this Agreement and prior to the Closing Date (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange shall have been suspended or materially limited, (ii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities, or (iii) there shall have occurred any material outbreak or escalation of hostilities or any change in the financial markets or other calamity or crisis that, in your judgment, is material and adverse and (b) in the case of any of the events specified in (a) such event singly or together with any other such event makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. VIII. This Agreement shall become effective upon the later of (x) execution and delivery hereof by the parties hereto and (y) release of notification of the effectiveness of the Registration Statement by the Commission. If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the principal amount of Securities set forth opposite their respective names in Schedule I bears to the principal 11 amount of Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Securities that any Underwriter has agreed to purchase pursuant to Article I be increased pursuant to this Article VIII by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non- defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 12 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, MBIA INC. By____________________________ Accepted, ________ __, 1995 LEHMAN BROTHERS INC. By____________________________ Acting on behalf of itself and the several Underwriters named herein SCHEDULE I Principal Amount of Securities Underwriter To Be Purchased ----------- ------------------- Lehman Brothers Inc. Donaldson, Lufkin & Jenrette Securities Corporation Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated ------------ Total................................. $75,000,000 ============ EX-12.01 3 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES EXHIBIT 12.01 MBIA INC. AND SUBSIDIARIES Computation of the Ratio of Earnings to Fixed Charges (In thousands except for ratios) The information appearing below presents historical consolidated financial results for the Company
Nine Months Years Ended December 31, Ended September 30, ------------------------------------------------ ------------------- 1990 1991 1992 1993 1994 1994 1995 Earnings: Operating income before taxes $165,336 $189,732 $244,261 $324,035 $329,422 248,444 258,296 Interest expense 17,283 18,565 20,523 26,900 27,159 20,214 21,271 Portion of rentals deemed to be interest 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- Earnings $182,619 $208,297 $264,784 $350,935 $356,581 $268,658 $279,567 ======== ======== ======== ======== ======== ======== ======== Fixed Charges: Interest expense $17,283 $18,565 $20,523 $26,900 $27,159 $20,214 $21,271 Portion of rentals deemed to be interest 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- Fixed Charges $17,283 $18,565 $20,523 $26,900 $27,159 $20,214 $21,271 ======== ======== ======== ======== ======== ======== ======== Ratio of earnings to fixed charges 10.6 11.2 12.9 13.0 13.1 13.3 13.1 ======== ======== ======== ======== ======== ======== ========
EX-23.01 4 CONSENT OF COOPERS & LYBRAND EXHIBIT 23.01 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement on Form S-3 (File No. 33-________) of MBIA Inc. and Subsidiaries (the "Company") of: 1. Our report dated February 1, 1995, on our audits of the consolidated financial statements of the Company as of December 31, 1994 and 1993 and for each of the three years in the period ended December 31, 1994, which report is incorporated by reference into the Company's 1994 Annual Report on Form 10-K; 2. Our report dated February 1, 1995 on our audits of the financial statement schedules of the Company, which report is included in the Company's 1994 Annual Report on Form 10-K. We also consent to the reference to our firm under the caption "Experts". Coopers & Lybrand L.L.P. New York, New York December 7, 1995 EX-24.01 5 POWERS OF ATTORNEY EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. WILLIAM O. BAILEY Dated the 5th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. JOSEPH W. BROWN, JR. Dated the 3rd day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. DAVID C. CLAPP Dated the 6th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. CLAIRE L. GAUDIANI Dated the 3rd day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. WILLIAM H. GRAY, III Dated the 6th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. FREDA S. JOHNSON Dated the 3rd day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. DANIEL P. KEARNEY Dated the 6th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. JAMES A. LEBENTHAL Dated the 3rd day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. ROBERT B. NICHOLAS Dated the 6th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. PIERRE-HENRI RICHARD Dated the 6th day of November, 1995 EXHIBIT 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints each of Louis G. Lenzi, Richard L. Weill and Pauline M. Cullen as his/her lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for his/her and in his/her name, place and stead, in any and all capacities, to sign Registration Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all amendments or post-effective amendments thereto for offering of corporate debt of MBIA Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute, may lawfully do or cause to be done by virtue hereof. JOHN A. ROLLS Dated the 3rd day of November, 1995 EX-25.01 6 STATEMENT OF ELIGIBILITY EXHIBIT 25.01 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) _____ --------------------------------- THE FIRST NATIONAL BANK OF CHICAGO (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 36-0899825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) THE FIRST NATIONAL BANK OF CHICAGO ONE FIRST NATIONAL PLAZA, SUITE 0286 CHICAGO, ILLINOIS 60670-0286 ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ----------------------------------- MBIA INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) CONNECTICUT 06-1185706 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 113 KING STREET ARMONK, NEW YORK 10504 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) ___ % DEBENTURES DUE 2025 (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING -------------------- INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of Currency, Washington, D.C., Federal Deposit Insurance Corporation, Washington, D.C., The Board of Governors of the Federal Reserve System, Washington D.C. (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR ------------------------------ IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A ----------------- PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 2 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 7th day of November, 1995. THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE, BY /S/ JOHN R. PRENDIVILLE JOHN R. PRENDIVILLE VICE PRESIDENT *Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing identical numbers in Item 12 of the Form T-1 of The First National Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of The CIT Group Holdings, Inc. filed with the Securities and Exchange Commission on February 16, 1993 (Registration No. 33-58418). 3 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT November 7, 1995 Securities and Exchange Commission Washington, D.C. 20549 Gentlemen: In connection with the qualification of an indenture between MBIA Inc. and The First National Bank of Chicago, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO BY /S/ JOHN R. PRENDIVILLE JOHN R. PRENDIVILLE VICE PRESIDENT 4 EXHIBIT 7 Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Suite 0460 Page RC-1 City, State Zip: Chicago, IL 60670-0460 FDIC Certificate No.: 0/3/6/1/8 ---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
C400 left arrow DOLLAR AMOUNTS IN ------------ ---------- THOUSANDS RCFD BIL MIL THOU ----------------- ---- ------------ ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin(1)..... 0081 3,184,875 1.a. b. Interest-bearing balances(2).............................. 0071 8,932,069 1.b. 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A).............................................. 1754 249,502 2.a. b. Available-for-sale securities (from Schedule RC-B, column D)..................................... 1773 536,856 2.b. 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and its Edge and Agreement subsidiaries, and in IBFs: a. Federal Funds sold........................................ 0276 2,897,736 3.a. b. Securities purchased under agreements to resell........... 0277 1,417,129 3.b. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C)......................................... RCFD 2122 16,567,408 4.a. b. LESS: Allowance for loan and lease losses................. RCFD 3123 358,877 4.b. c. LESS: Allocated transfer risk reserve..................... RCFD 3128 0 4.c. d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c).......... 2125 16,208,531 4.d. 5. Assets held in trading accounts.............................. 3545 13,486,931 5. 6. Premises and fixed assets (including capitalized leases)..... 2145 516,279 6. 7. Other real estate owned (from Schedule RC-M)................. 2150 11,216 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).................... 2130 12,946 8. 9. Customers' liability to this bank on acceptances outstanding.................................................. 2155 501,943 9. 10. Intangible assets (from Schedule RC-M)....................... 2143 111,683 10. 11. Other assets (from Schedule RC-F)............................ 2160 1,258,270 11. 12. Total assets (sum of items 1 through 11)..................... 2170 49,325,966 12. - ------------------
(1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held in trading accounts. 5 Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Suite 0460 Page RC-2 City, State Zip: Chicago, IL 60670-0460 FDIC Certificate No.: 0/3/6/1/8 ---------
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU ----------------- ------------ LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part 1).......... RCON 2200 14,889,235 13.a. (1) Noninterest-bearing(1)........................... RCON 6631 5,895,584 13.a.(1) (2) Interest-bearing................................. RCON 6636 8,993,651 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, part II)............................................. RCFN 2200 13,289,760 13.b. (1) Noninterest bearing.............................. RCFN 6631 315,549 13.b.(1) (2) Interest-bearing................................. RCFN 6636 12,974,211 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds purchased.............................. RCFD 0278 2,942,186 14.a. b. Securities sold under agreements to repurchase....... RCFD 0279 1,160,512 14.b. 15. a. Demand notes issued to the U.S. Treasury............. RCON 2840 112,768 15.a. b. Trading Liabilities.................................. RCFD 3548 7.872,221 15.b. 16. Other borrowed money: a. With original maturity of one year or less........... RCFD 2332 2,402,829 16.a. b. With original maturity of more than one year......... RCFD 2333 643,987 16.b. 17. Mortgage indebtedness and obligations under capitalized leases...................................... RCFD 2910 278,108 17. 18. Bank's liability on acceptance executed and outstanding......................................... RCFD 2920 501,943 18. 19. Subordinated notes and debentures....................... RCFD 3200 1,225,000 19. 20. Other liabilities (from Schedule RC-G).................. RCFD 2930 981,938 20. 21. Total liabilities (sum of items 13 through 20).......... RCFD 2948 46,300,487 21. 22. Limited-Life preferred stock and related surplus........ RCFD 3282 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus........... RCFD 3838 0 23. 24. Common stock............................................ RCFD 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock)........................................ RCFD 3839 2,314,642 25. 26. a. Undivided profits and capital reserves............... RCFD 3632 510,093 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities........................ RCFD 8434 (880) 26.b. 27. Cumulative foreign currency translation adjustments..... RCFD 3284 766 27. 28. Total equity capital (sum of items 23 through 27)....... RCFD 3210 3,025,479 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28)........ RCFD 3300 49,325,966 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external Number auditors as of any date during 1993............................................ RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4. = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work ------------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. 6 -----END PRIVACY-ENHANCED MESSAGE-----