UPDATE 2-MBIA sees agreement with Puerto Rico's PREPA in coming months

martes 1 de marzo de 2016 10:55 GYT

(Adds share price, earnings numbers, buyback program)

NEW YORK, March 1 (Reuters) - An agreement between creditors and Puerto Rico's electric power authority PREPA will likely be concluded in the coming months, an executive at bond insurer MBIA Inc said on Tuesday.

Bill Fallon, chief executive officer of MBIA's National Public Finance Guarantee Corp unit, made the comments during a conference call a day after the company released earnings.

MBIA has around $4 billion of exposure to Puerto Rico's debt. The island is currently undergoing a restructuring that will affect up to $70 billion of its debt, a process that is expected to impose losses on some bondholders.

Puerto Rico's House of Representatives has approved a bill aimed at overhauling PREPA, pushing the agency a step closer to finalizing a deal with creditors to restructure more than $8 billion in debt.

MBIA's share price rose as high as $7.18 on Tuesday, hitting its best in more than three months. It later eased to $6.98, up 1.7 percent.

The company posted operating earnings of 7 cents per share on Monday, missing the consensus estimate. But it announced a $100 million share buyback program, helping to lift the stock.

However hurdles still remain before the deal is finalized. A price hike must be agreed to by a local regulator and individual bondholders not part of the agreement must be persuaded to sign on.

Fallon said he could not divulge details of negotiations with PREPA but that he was "optimistic that a deal will take place later this year."

MBIA CEO Jay Brown said uncertainty over Puerto Rico continued to create an "extremely meaningful headwind" for the insurer's share price, but added that the company's balance sheet and liquidity are "more than adequate" to cover its exposure. (Reporting by Edward Krudy; Editing by Jeffrey Benkoe)