III Seminario DeInversiones Amafore

Puerto Vallarta 17 Octubre, 2003

Capital Strength. Triple-A Performance.

- 2 - Capital Strength. Triple-A Performance.

Financial Guaranty Insurance: The Product

Unconditional and irrevocable guarantee of full transaction principal and interest as originally scheduled

- 3 - Capital Strength. Triple-A Performance.

Notable Product Features

Insured bonds sell with MBIA’s Aaa/AAA ratings

For investors, insurance should be viewed as credit enhancement not credit substitution

Upon payment of a claim, MBIA is subrogated to the rights of bondholders

- 4 - Capital Strength. Triple-A Performance.

A Win/Win Proposition

Issuers & investors both obtain tangible benefits Issuers achieve certainty of execution at the very attractive spreads

associated with MBIA’s Triple-A ratings Investors obtain:

The security of MBIA’s timely Triple-A rated guarantee

Ratings downgrade, headline and price protection

Portfolio Diversification

Improved secondary markets liquidity

Remediation and surveillance leverage

Payment in accordance with original schedule

- 5 - Capital Strength. Triple-A Performance.

MBIA Highlights

Largest monoline financial guarantor in terms of assets, par value insured, market share and claims-paying resources

AAA/Aaa/AAA ratings (S&P/Moody’s/Fitch) Unmatched strength and insurance capacity

Balance sheet--US$11 billion in claims-paying resources Reinsurance treaties

Global Company Offices in New York, London, Madrid, Paris, Sydney, Singapore and Tokyo

US$[58] billion in non-U.S. net insurance in force

Large asset management business--$US 36 billion under management Listed on the NY Stock Exchange (NYSE: MBI)

- 6 - Capital Strength. Triple-A Performance.

MBIA Foundation Principles

Build the strongest team

No-loss underwriting

Triple-A ratings

Build shareholder value

- 7 - Capital Strength. Triple-A Performance.

MBIA Business Strategy

Our distinctive competency is credit risk management. We apply this skill to build and maintain the following franchises:

Global credit enhancement

Institutional investment management

Our products and services are provided to public finance and financial institutions clients

We manage our business with prudent risk taking, low annual volatility and competitively superior returns, consistent with our Triple-A ratings

- 8 - Capital Strength. Triple-A Performance.

Strong Triple-A Ratings

MBIA Insurance Corporation

MBIA’s claims-paying resources totaled $11.9 billion on June 30, 2003

78 percent of our insured net par outstanding is rated A or above on the global rating scale (one full rating category higher than UMS)

The average quality of our investment portfolio is Double-A, with 99 percent rated A or above

Balance sheet and profitability are strong and improving

- 9 - Capital Strength. Triple-A Performance.

MBIA Insurance Corporation: Claims-Paying Resources

Capital Ratio 154:1 162:1 166:1 159:1 166:1 164:1 159:1 153:1 151:1 146:1 144:1 141:1

Claims Paying 75:1 80:1 83:1 83:1 87:1 88:1 88:1 85:1 85:1 82:1 82:1 78:1Ratio

Leverage Ratio 32:1 37:1 39:1 40:1 44:1 45:1 46:1 46:1 46:1 45:1 45:1 43:1

$ Billions

$3.5 $4.0$4.5

$5.1$5.8

$6.8$7.8

$8.5$9.1

$11.0$10.1

$11.9

1993 1995 1997 1999 2001 6/31/03

- 10 - Capital Strength. Triple-A Performance.

Investor Benefits: No-Loss Underwriting & Surveillance

MBIA Insurance Corporation

Transactions must meet MBIA’s stringent credit criteria and be investment grade

We actively monitor the insured portfolio and aggressively remediate poorer performing transactions

The workout function allows avoidance or minimization of losses incurred

In 28 years, MBIA has insured over 88,000 issues representing $1.583 trillion in net debt service insured, and has incurred only 3 basis points in losses on 60 issues

- 11 - Capital Strength. Triple-A Performance.

Percent of Net Par Outstanding by Bond Type(As of June 30, 2003)

$514.2 Billion

MBIA Insurance Corporation

- 12 - Capital Strength. Triple-A Performance.

MBIA Insurance Corporation

New entrants -- increased competition

Pricing pressure

Deteriorating underwriting criteria

Ratings Risk

Sharp, sustained drop in issuance

Large, unexpected losses

What Are the Risks?

- 13 - Capital Strength. Triple-A Performance.

U.S. Structured

Finance29%

U.S. Municipal55%

Non-U.S.16%

Financial Guarantee Premium Sources

MBIA Insurance Corporation

1996

U.S. Structured

Finance18%

U.S. Municipal57%

Non-U.S.25%

2003 YTD

$663.8 Million $612.4 Million

- 14 - Capital Strength. Triple-A Performance.

MBIA Inc.

0

10

20

30

40

50

60

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 YTD2003

Book Value Per Share Average Annual Growth Rate 13%

Adjusted Book Value Per Share Average Annual Growth Rate 12% $ Per Share

Building Shareholder ValueHistorical Book Value Per Share

- 15 - Capital Strength. Triple-A Performance.

Summary – MBIA Strengths

Monoline industry leader with unmatched financial position

Triple-A global ratings by Moody's, Standard & Poor's, and Fitch

Excellent credit quality and diversification of insured portfolio

Highly rated, liquid investment portfolio

Conservative underwriting and constructive remediation process

State-of-the-art portfolio modeling complements risk management

Strong management team

- 16 - Capital Strength. Triple-A Performance.

Why Do Issuers Use Financial Guaranty Insurance?

Most cost-effective borrowing cost

Certainty of execution, particularly during periods of stress

Structuring expertise

Access to the broadest range of investors

- 17 - Capital Strength. Triple-A Performance.

MBIA Global Business Lines

Public Finance

State & Municipal Obligations General Obligations Leases Tax–backed debt

Transportation Infrastructure

Colleges & Universities

Hospitals

Structured Finance

Mortgage Backed Securities Residential Commercial

Consumer Receivables Credit cards Car loans

Corporate & Future Flow Receivables

Collateralized Debt Obligations

Equipment Pools/Transportation Fleets

- 18 - Capital Strength. Triple-A Performance.

Financial Guaranty Market Penetration

U.S. public finance 45% - 55% 8% - 10%

U.S. structured finance 25% - 35% 10-14%

International public finance Very Low >20%

International structured finance Very Low >20%

Insured 3 - 5 YearPenetration CAGR

- 19 - Capital Strength. Triple-A Performance.

Mexico: Target Sectors

Transportation infrastructure Toll roads Airports Ports

Housing Mortgage backed finance Construction bridge loan securitization

Electric, gas and water utility infrastructure

State and municipal finance

- 20 - Capital Strength. Triple-A Performance.

MBIA’s Pricing Methodology

MBIA’s insurance pricing has two overall objectives: Offer economic benefit to issuer for utilizing insurance Balance transaction risk and return

Successful pricing should offer savings to issuer while achieving risk adjusted return hurdles

- 21 - Capital Strength. Triple-A Performance.

Overview of Issuer Economics

Credit Rating A2/A Aaa/AAA

Coupon Rate 5.55% 5.4%

Net Interest Cost $53,208,000 $52,071,000

Cost of Insurance -0- $306,200

Total Cost $53,208,000 $52,377,200

Net Savings -0- $830,800

P.V. Savings -0- $356,346

XYZ State, $50 MillionGeneral Obligation Bonds, Series 2000 (30-Year Term)

Uninsured MBIA-Insured

- 22 - Capital Strength. Triple-A Performance.

International FinancePercent of Net Par Outstanding by Country(As of June 30, 2003)

Germany10%

Internationally Diversified

53%

United Kingdom10%

Netherlands 2%

Spain 2%

Mexico 2%

Italy 3%

Japan 3%

Canada 2%

France 1%

Other 6%

Australia 6%

$69.2 Billion

- 23 - Capital Strength. Triple-A Performance.

Mexico is a Priority Market for MBIA

Increased economic integration with U.S.

Favorable macroeconomic management

Acceptable political environment

Growth of fixed income capital markets Investor credit quality requirements Investor need for portfolio diversification

Sound legal basis for asset securitization

- 24 - Capital Strength. Triple-A Performance.

Challenges for MBIA in Mexico

Triple-B sovereign ratings ceiling presents a narrow opportunity for “global” rating scale investment grade credits

Need for ongoing success with legal and regulatory systems

Well established global relative value of MBIA wrapped bonds is not yet fully recognized in the Mexican domestic market

The spread above UMS that domestic investors have initially demanded is a distortion of MBIA’s global relative value

Not fully explained by the peso-dollar swap spread Will likely reduce the volume of wrapped paper for Mexican

obligors placed in the domestic market

- 25 - Capital Strength. Triple-A Performance.

Conclusion: Investor Opportunities

MBIA wrapped bonds provide investors with significant benefits

Very favorable risk adjusted returns

Portfolio diversification, uncorrelated to systemic Mexican market risks

Unparalleled credit strength and stability, reflected in MBIA’s Triple-A “global scale” ratings

- Ensures timely payment of debt service when due- Eliminates credit loss risk and downgrade risk - Promotes price stability

Much enhanced secondary markets liquidity

Experienced surveillance team – manages long term credit risks

- 26 - Capital Strength. Triple-A Performance.

Conclusion: MBIA-Investor Challenges

MBIA would like to continue to work with local investors on those remaining challenges posed by wrapped bonds in Mexico

Acceptance of the full value of global scale Triple-A ratings Residual uncertainty regarding the unconditional nature of MBIA’s

insurance policy Reconcile trading value and trading levels Demand characteristics and limitations of local markets investors Treatment of wrapped bonds under a changing regulatory regime

Capital Strength . Triple-A Perform ance.

www.mbia.com