P R E S E N T A T I O N

MBIA Insurance Corporation

April 2005

MBIA’s results through 12/31/04

Capital Strength. Triple-A Performance.

Foundation Principles

 Build the strongest team  No-loss underwriting  Triple-A ratings  Build shareholder value - 1 -

Capital Strength. Triple-A Performance.

MBIA & The Financial Guarantee Product

    MBIA is a “monoline” insurance company Irrevocable & unconditional guarantee of scheduled debt service when due The securities we guarantee are rated Triple-A by Standard & Poor's, Moody's and Fitch We guarantee a wide range of debt obligations   

Benefits to Investors

 Eliminates credit losses and downgrade risk; and significantly reduces “headline risk”  Greatly improves liquidity and price stability Long-term “buy & hold” investor in credit risk Active surveillance; interests aligned with investor’s Diversification of portfolio

Capital Strength. Triple-A Performance.

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Rating Agency Rationale

For Triple-A Financial Strength Rating

 Conservative credit standards  Strong capitalization levels  Diversified insured portfolio  High quality investments  Stable profitability  Highly experienced management - 3 -

Capital Strength. Triple-A Performance.

Monoline Industry -- Financial Strength

Claims-Paying Resources Rating Agency Ratios $ Billions (As of December 31, 2004) 14 12 10 8 6 4 $12.9

2 0 MBIA Leverage Ratio 46:1 $11.2

Ambac 41:1

* As of 9/30/04

$5.1

FSA* 66:1 Definition of Terms Claims-Paying Resources Leverage Ratio Credit Quality Ratio Tail Risk Ratio Dispersion Ratio Hard Capital Ratio Total Capital Ratio Margin of Safety

Formula: Formula: Formula: Formula: Formula: Formula: Formula: Formula:

$3.3

FGIC 73:1 $0.4

XLCA* 16:1 12/31/03 Credit Quality Tail Risk Ratio* Ratio* (Lower is Better) Dispersion Ratio* 12/31/03 Hard Capital Total Capital Margin of Ratio* Ratio* Safety** (Higher is Better) MBIA

Ambac FSA FGIC XLCA/XLFA Industry Avg. (2)

40 bps

40 bps 22 bps 16 bps 39 bps 34 bps

125 bps

131 bps 75 bps 67 bps 168 bps 115 bps

3.13x

3.28x

3.39x

4.12x

4.58x

3.51x

1.50x

1.45x

1.72x

1.92x

1.50x

1.55x

1.46x

1.43x

1.62x

1.78x

1.28x

1.49x

1.5-1.6x

1.3-1.4x

1.6-1.7x

1.3-1.4x

1.3-1.4x

(1) 1.4-1.5x

* Moody’s Measurements (Both Hard and Total Capital Ratios should be >1.30 to earn the Aaa) ** S&P’s Measurements (1.25x is the minimum for a AAA rating for a publicly-held company) (1) XLCA/XLFA’s Margin of Safety is an average of the weighted averages of XLCA’s and XLFA’s theoretical depression losses, claims-paying resources and capital remaining at end of depression.

(2) $ weighted average of NPO Statutory Capital + Unearned Premium Reserves + PV of Installment Premiums + Loss Reserves + Soft Capital Facilities Net Par Outstanding ÷ Claims-Paying Resources Expected PV of Net Losses/Adjusted Net Par Outstanding 99.9 Percentile Losses/Adjusted Net Par Outstanding 99.9 Percentile Losses ÷ Expected Losses Hard Capital (QSC & UPR) ÷ 99.9 Percentile Losses Total Capital (Hard & Soft Capital & PV Installment Premiums) ÷ 99.99 percentile losses Coverage of theoretical losses generated over a 7-year stress period by capital remaining at the end of the stress period - 4 -

Capital Strength. Triple-A Performance.

Financial Highlights

MBIA Inc. and Subsidiaries

(As of December 31, 2004) ($ in MM) Adjusted Direct Premiums Gross revenues from continuing operations Net Income Expense Ratio - Statutory Total Assets Claims-Paying Resources Loss Reserves

1999

710* 1,149 315 23.6% 12,247 8,539 469

2000

829 1,274 525 22.1% 13,865 9,140 503

2001

1,042 1,406 568 13.4% 16,210 10,087 581

2002

1,204 1,433 579 16.8% 18,835 11,015 621

2003

1,621 1,857 816 12.8% 30,324 12,639 691

2004

1,146 2,001 815 18.3% 33,027 12,888 727 * Starting 2001, we are reporting “ADP” (Adjusted Direct Premium), rather than “AGP” (Adjusted Gross Premium). ADP represents upfront premiums and the estimated present value of current period and future installment premiums for policies issued in the period. AGP netted our reinsurance with Ambac.

Capital Strength. Triple-A Performance.

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BBB+ 10.9%

Insured Portfolio - Credit Quality Distribution

MBIA’s Net Par Outstanding

December 31, 1999 $384 Billion 71.5% Rated A or Better A 34.8% December 31, 2004 $586 Billion 80.3% Rated A or Better A 25.8% A+ 9.7% A+ 12.2% BBB+ 5.1% BBB 16.3%

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Capital Strength. Triple-A Performance.

MBIA Insurance Corporation

Percent of Net Par Outstanding by Bond Type

(As of December 31, 2004) Utility 12% Pooled Corporate 5% CDO 14% Asset-Backed 5% Mortgage-Backed 8% General Obligation 25% Sovereign/Sub Sovereign 2% Housing 3% Investor-Owned Utilities 2% Special Revenue 8%

$585.6 Billion

Higher Education 3% Transportation 7% Health Care 6%

Capital Strength. Triple-A Performance.

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Insurance Investment Portfolio

      $10.2 billion as of December 31, 2004 Fixed-income securities Average quality Aa Only investment grade bonds No real estate Limits by bond sector, issuer, maturity and state   Effective duration 5.27 years Average maturity 8.46 years

Aaa 68%

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Baa 1% A 14% Aa 17% Capital Strength. Triple-A Performance.

Overview of MBIA’s Portfolio

Portfolio Sector Growth

Total Net Par Outstanding U.S. Public Finance U.S. Structured Finance Non U.S. $400 $350 $300 $250 $200 $150 $100 $50 $0 1995 $188B 1996 $233B 1997 $277B 1998 $359B 1999 $382B - 9 2000 $420B 2001 $452B 2002 $497B 2003 $541B 2004 $585B

Capital Strength. Triple-A Performance.

Total Portfolio Runoff – Declining Net Par Outstanding

(As of December 31, 2004) $ in Billions 600 500 400 300 200 100 0 U.S. PFG U.S. STF Non U.S. INTL Capital Strength. Triple-A Performance.

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Risk Management

Key Characteristics

 State of the art analytic and modeling tools   Coordinate human capital Rigorous approval process   Ongoing refinement via feedback mechanisms Two levels of underwriting committees  Underwriting Committee  Executive Risk Committee - 11 -

Capital Strength. Triple-A Performance.

Risk Management Criteria

Public Finance

  Essentiality Issuer Strength Municipal  Willingness and ability to pay  Minimum size of jurisdiction/tax area  Diversity of taxpayers/taxes  Legal basis   Legal Provisions Investment Grade Special Revenue  Public purpose/community support  Size of institution/service area and strong market position  Diversity of users/revenue  Ample/diverse liquidity and historical debt service coverage over 1.0x

 Growth based - projections must pass worst/probable case scenario

Capital Strength. Triple-A Performance.

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Risk Management Criteria

Structured Finance

Goal: Asset pools diversified by geography and industry with structural protections against concentrations  Assets  Historical asset pool information and due diligence on statistical sample  Structure  First loss protection via excess cash flow, reserve accounts, overcollateralization, bank letters-of credit  Legal structure separates assets from seller/servicer through “true sale” to a bankruptcy remote vehicle. Also perfected first security interest  Asset performance tests for delinquency, losses, etc. trap excess cash flow into a reserve account, re-direct excess cash flow, transfer servicing  Players  Investment grade and non investment grade seller/servicers: financially viable with successful history of originating and servicing  Financial covenants:  Termination of new asset purchases (revolving deals)    Trapping excess cash flow Accelerated debt paydown Servicing transfer  On-site financial and operational review - 13 -

Capital Strength. Triple-A Performance.

MBIA Insurance Corporation

MBIA Loss History

Inception to December 31, 2004 Issues insured Debt Service Insured from Inception: Aggregate Incurred Losses: * Over 99,000 $ 1.820 Trillion $ 586 Million Case Loss Reserves: Paid Losses: $ 247 Million $ 339 Million Losses Equal to 0.03% of Insured Debt Service Since Inception * Includes $236 million for AHERF Unallocated Reserves: $284 Million

Capital Strength. Triple-A Performance.

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Portfolio Management

Observations

 The probability of MBIA defaulting on a guaranty is on the order of 100 times less than the probability of a Triple-A corporate defaulting on its debt  MBIA holds capital equal to a 99.99

th percentile or a 1 in 10,000 event  MBIA’s product diversification, rigorous selection and underwriting process and active monitoring and surveillance lowers portfolio risk and improves the quality of our guaranty  International expansion lowers an insurer’s portfolio risk - 15 -

Capital Strength. Triple-A Performance.

International

Overview and MBIA Profile

(as of June 30, 2004)   Substantial growth potential - 20%+ CAGR Globalization and convergence of capital markets  Privatization  Decentralization  International offices  London, Paris, Madrid, Milan, Sydney, Tokyo and Singapore.

 Depth of analytical talent in Armonk supports our global effort  Product specialists in Armonk work jointly with analysts located in overseas offices.  Same underwriting process and committees as in U.S.

 International Net Par Outstanding represents 18% of the 12/31/04 book.

International ADP YTD 2004 represents 35% of the company’s total.

Capital Strength. Triple-A Performance.

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International

Top 10 Country Exposures (excluding Global Portfolios*) - As of 12/31/04

Country United Kingdom Germany Australia France Japan Spain Italy Canada Chile** Portugal Foreign Currency Rating AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa Aaa/AA AAA/Aaa Aa2/AA AAA/Aaa Baa1/A Aa2/AA Total: Net Par ($MM) 14,675 10,903 6,150 2,258 2,084 1,922 1,912 1,730 1,646 1,560 44,842 Total International Net Par: Global (Intl) Portfolio*: 104,994 53,913 Total Book Net Par: 585,575 % of Intl Net Par 14.0% 10.4% 5.9% 2.2% 2.0% 1.8% 1.8% 1.6% 1.6% 1.5% 42.7% 51.3% % of Total Book Net Par 2.5% 1.9% 1.1% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 7.7% 9.2% *Represents the aggregation of exposure to transactions that span multiple countries **Emerging market exposure remains modest. Net Par from this country and other Emerging Markets countries equaled $5,778 million, representing 5.5% of International Net Par and 1.0% of total Net Par. - 17 -

Capital Strength. Triple-A Performance.

International MBIA Net Par by Bond Type

$105 Billion Outstanding

(as of December 31, 2004) CDO's 39% Pooled Obligations* 9% Asset-Backed 5% * Includes direct corporates, corporate pools Mortgage-Backed 20%

$105 Billion

- 18 IOU's 3% Financial Risk 1% Transportation 9% Utilities 4% Sub-Sovereign 1% Sovereign 8% Other Infrastructure 1%

Capital Strength. Triple-A Performance.

Benefits to Investors

Price Protection $102 $101 $100 $99 $98 $97 $96 $95 $94 $99.63

$98.66

$99.53

$97.53

Insured (MBIA) Sen/Sub Jun-99

(0.1%) (1.15%)

Jul-99 MBIA

- ContiMortgage Home Equity Loan Trust 6.63% - 12/15/18

Sen/Sub

- ContiMortgage Home Equity Loan Trust 6.36% 11/15/19 Source: Bloomberg - 19 -

Capital Strength. Triple-A Performance.

Why Sell Insured Bonds?

Hidden Value - Price Protection Per $100 of Par Value 140 120 100 12/7/00 12/21/00 $103.72

$102.05

$102.81 80 $68.05

60 40 20 0 1/14/01 $102.81

$45.00

12/31/01 $102.81

$95.00

6/6/02 11/13/03 $106.00

$101.50

$115.00

$110.00

Insured Uninsured

Southern California Edison Bonds 7.625% 2010 - 20 -

Capital Strength. Triple-A Performance.

Exposure to MBIA

How to Measure Exposure to MBIA



Joint Default Probability Approach:

“gross-up” standard limit use joint default probabilities to 

Tenor Approach:

vary exposure by tenor of underlying transaction 

Risk Based Capital Charge Approach:

calculate the amount of incremental risk covered by MBIA as demonstrated by the S&P capital charge 

BIS Risk Weighted Approach:

Use the BIS guidelines to calculate the amount of exposure in a deal which is attributable to MBIA

Capital Strength. Triple-A Performance.

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Benefits to Investors

  

Joint Default Probability Approach

Default probability of MBIA wrapped assets far lower than default probability of unwrapped, Triple-A rated assets:    Default probability of Aaa rated corporate -- 0.79%* Default probability of A2 rated ABS (1/3)/munis(2/3) -- 0.95%** Default probability of A2 rated corporates/munis wrapped by MBIA - .0079 X .0095 = .000075*** Conclusion: The joint default probability of an average MBIA-wrapped security is less than 1% of an unwrapped Triple-A corporate (.000075/.0079 = .00949). In terms of default probability, $10 million of exposure to unwrapped, Triple-A rated corporates is equivalent credit risk to $1.05 billion of exposure to MBIA wrapped obligations Source: Moody’s Feb 2002 Corporate Bond Default Study (10 year average cumulative default rates by ratings over 1970-2000 period) & Moody’s Portfolio Risk Model for Financial Guarantors, July 2000. * This does not take into account that MBIA is less likely to default than a Triple-A rated corporate.

** Assumes that ABS defaults at the same rate as corporates, which is not true; ABS default less frequently.

*** Does not take into account correlation risk.

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Capital Strength. Triple-A Performance.

MBIA Performance Perseveres Through Adversity

MBIA’s Book Value

50 45 40 35 30 25 20 15 10 5 0 l l Savings and Loan crisis l l l Hurricane Andrew - 50 killed, $25B in damage in Southern Florida l Russian crisis U.S. Recession, declining real estate values, stress on munis and consumer ABS; Philadelphia financial crisis l l Subprime mortgage sector difficulties; AHERF bankruptcy; l Capital Asset write-off Black Monday Stock Market Drop l Gulf War; l Brevard County Lease Revenue Bonds l Mississippi River flood, 52 killed, $15-$20B in damage, 70,000 displaced; l First World Trade Center bombing, Port Authority exposure l l l California earthquake (Northridge) 57 killed, $15B in damage; Orange County bankruptcy; Mexico financial crisis l l Iraq war; CA crisis l US Tech bubble burst; l California utility crisis, PG&E in Ch 11 , SoCal Ed restructuring l 9/11 - Afghan war l Airline consolidation stresses airports; l Declining enrollment stresses colleges l Asian crisis; l Subprime auto sector difficulties; l Balanced Budget Act - stress on health care sector l l l EETCS challenged; CDOs under scrutiny; Consumer ABS stressed

Capital Strength. Triple-A Performance.

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Conclusion

MBIA Strengths

 Rated Triple-A by Moody's, Standard and Poor's, and Fitch  Leading financial guarantee insurance company  Excellent credit quality and diversification of insured portfolio  Strong financial position  Highly rated and liquid investment portfolio  Conservative underwriting and monitoring standards  Strong management team

Capital Strength. Triple-A Performance.

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Contacts

For more information about MBIA Insurance Corporation please contact us:

Contact

Italy and Greece:

Luis Cuttica

European Infrastructure:

Paul David

Phone

+39 02 86 337 627 +44 20 7920 6360

Fixed Income Investor Relations:

Charlie Williams +1-914-765-3481 Chip Reilly Stephanie Dougherty +1-914-765-3227 +1-914-765-3631

Equity Investor Relations:

Willard Hill

Website:

www.mbia.com/investor/index.html

+1-914-765-3860

E-mail

[email protected] [email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Capital Strength. Triple-A Performance.

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