Octave Specialty Group, Inc. (OSG) Q3 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Ambac Financial Group, Inc. Third Quarter 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference Ms. Abbe Goldstein, Head of Investor Relations and Corporate Communications. Ms. Goldstein, you may begin.

Thank you. Good morning and thank you all for joining today’s conference call to discuss Ambac Financial Group’s third quarter 2016 financial results. We’d like to remind you that today’s presentation may contain forward-looking statements, which are based on management’s current expectations and are subject to uncertainties and changes in circumstances. Any forward-looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially from such forward-looking statements. Factors that could cause this include the factors described in our most recent SEC-filed quarterly or annual reports under Management’s Discussion and Analysis of Financial Condition and Results of Operation and under Risk Factors. Ambac is not under any obligation and expressly disclaims any obligation to update any forward-looking statement whether as a result of new information, future events or otherwise. Today’s presentation contains non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures are included in our earnings press release, which is available on our website at ambac.com. Please note we have posted slides on our website to accompany this call. Our speakers today are Nader Tavakoli, President and CEO, and David Trick, our CFO. At the conclusion of their prepared remarks, I will open the call for your questions. I would now like to turn the call over to Mr. Tavakoli.

Good morning. Thank you, Abby, and thank you all for joining us for today's call. As we announced last evening, we had another successful quarter of executing against our strategic priorities in risk reduction and loss management while achieving strong earnings and significantly increasing investments in our insured securities. In addition, we turn the corner in our ongoing expense management efforts and saw the benefits of savings from recent headcount reductions and other expense management initiatives begin to positively affect our bottom line. We generated net income per diluted share of $2.22 and operating earnings per diluted share of $3.23 during the quarter. Our book value and adjusted book value now stand at $42.32 per share and $32.12 per share, respectively. David will take you through the specifics of the quarter's financial achievements in a moment, but let me briefly provide some color on key accomplishments. Risk reduction, we reduced our insured portfolio during the quarter by an additional $8 billion net par $86.4 billion. While the majority of this reduction resulted from calls and refundings in our public finance book, we’re increasingly engaged in proactive measures to calls policy cancellations or other risk reduction in both our high-grade as well as our adversely classified credits. Our adversely classified book is high-touch requiring our active workout and structuring expertise and in some cases, economic contribution to eliminate or commute the risk. Given the current rate environment, we were also being proactive in managing down our investment grade public finance book where we’ve been actively engaged in educating and encouraging borrowers to refinance and thereby relieve us of our policy obligations. It's worth noting that a substantial portion of our public finance book paid premiums at issuance and therefore we lose no revenue by de-risking these deals. All in, since emerging from bankruptcy, we’ve now paired our portfolio by a total of $110 billion or 56% including a 46% reduction in our adversely classified credits. We also had a very successful quarter in our investment book where we generated income of $91 million and produced an annualized total return of 7.4%. Additionally, we made investments totaling $287 million in our own short securities during the quarter. Our investments and our own obligations continue to be executed of deals considerably in excess of the accrual rates on our liabilities. Overall, our investment portfolio, including investments in our own obligations continues to perform very well. Moving forward, we will continue to strategically and selectively deploy capital in our own short securities working within the prescriptive limitations on such investments. All in, our asset liability management program has thus far produced well over $3 billion of discount capture for the benefit of our shareholders while our loss mitigation efforts have resulted in an even larger amount of avoided losses. Expense management, as I mentioned a moment ago, we began to see the benefits of our efforts to reduce expenses across the organization impact the bottom line as we have cycled past many of the costs related to those initiatives. While there's obviously not a linear relationship between expenses and the size of our insurance book going forward, expense management and the optimization of our operating platform will continue to be an area of substantial focus in order to ensure that we're controlling everything we can to maximize value for our shareholders as we continue to reduce AAC's book. I know you are all keen to hear an update on our litigation matters and I’d like to reemphasize that maximizing value for our shareholders through the enforcement of our legal rights continues to be an important value driver for Ambac. This is true both in our RMBS rep and warranty claims and in other areas where we believe there may be the potential for recoveries or loss avoidance. With respect to our RMBS cases against Bank of America and as we’ve talked about before, Judge Bransten issued favorable summary judgment decisions on primary and secondary liability in the fall of 2015 and those decisions are now on appeal. Hearings on those appeals are expected later this year or in the first quarter of 2017 thus while predicting the timing of litigation is always difficult, we are hopeful that the case will move to trial in the second half of 2017. As most of you are aware, this summer, the Special Deputy Commissioner, or SDC, held a listening session with policyholders during which he stated among other things that his objective is to seek and exit of the segregated accounts from rehabilitation. He also said that although his preferred goal would be to achieve an exit from rehabilitation through a consensual plan, he would advise the rehabilitator to use all tools available to accomplish a successful and durable exit that enhances Ambac Assurance’s long-term claims paying ability. We understand that the SDC has invited additional feedback from policyholders as he evaluates possible options relative to the segregated account. We're doing all we can to support the SDC in his determinations regarding a possible conclusion to the segregated account proceedings. It is important to bear in mind however that the terms, conditions and timing of a potential conclusion of the segregated account rehabilitation proceedings will ultimately be determined solely by the rehabilitator subject to the approval of the Rehabilitation Court. Turning now to Puerto Rico, we remain cautiously optimistic about recent developments. We believe PROMESA holds the tools for the Commonwealth to be returned to financial health and prosperity. Moreover, we believe the members of the oversight board will utilize those tools to bring sorely needed fiscal discipline and structural reform to the island. The board’s early actions demonstrate their commitment in this direction. As we have said previously, the separation of policy decisions from electoral politics and economically troubled governmental jurisdictions has a near-perfect record of success in the United States. I'm proud of Ambac's leadership on the issue of Puerto Rico’s future. Not just because it's important to Ambac and our stakeholders, but because I believe strongly that our interests are completely aligned with the long-term interest of the people of Puerto Rico. The 3.5 million American citizens that live on Puerto Rico deserve to have properly functioning government services, they need adequate and affordable healthcare, better roads and infrastructure and private sector jobs. All of this relies on transparency and consensual agreements with the island's existing and future creditors and investors; something we believe is top of mind for the oversight board. On October 13, Ambac and the Association of Financial Guaranty Insurers lead the Puerto Rico Revitalization Conference here in New York, which featured thought leaders from across the public and private sectors. Attendees saw detailed data demonstrating that Puerto Rico suffers liquidity and spending problem not a leverage or solvency problem. On the spending front, for example, Puerto Rico began its profitable [ph] deficit spending starting in the 1990, but it was still enjoying Section 936 related revenues. In the last 10 years for which figures are available, Puerto Rico continued this runaway spending increasing expenditures by 47% from 2004 till 2014. And in the latest five years, Puerto Rico has increased spending by another 10% despite the governor's claim of austerity. Even Detroit, not exactly a model of fiscal discipline, cut expenses by 20% in the five years prior to seeking to reduce its obligations via Chapter 9 in 2013. And what's worse is that very little of the spending in Puerto Rico has gone into infrastructure or in the real economy. Regarding Puerto Rico's leverage insolvency, attendees at our conference heard that Puerto Rico is far from overleveraged. While Mr. Padilla the outgoing governor and his advisors have claimed that Puerto Rico's debt service to revenue is 36%, the ratio is actually 15.6% when you include the revenue that should accompany included debt obligation and correct other fundamental flaws in the Commonwealth's calculations. Moreover, according to the fiscal year 2016 approved budget, the General Fund had a debt service to revenue ratio of 12.3%, well under the 20% that Moody’s considers as sustainable debt nor our Puerto Rico's residents overtaxed as tax collections as a percentage of GDP are 11% compared to 22% for the average U.S. state. Attendees at our conference also heard about numerous readily available measures [indiscernible] pursue including what we believe to be in excess of $3 billion that’s available annually from relatively low hanging fiscal improvements including better collections of existing taxes and expense reduction measures such as agency consolidations and centralized procurement. We believe the $3 billion opportunity is achievable without any substantial austerity measures and this sum would be more than sufficient to cover any reasonable budgetary gap including ongoing pension obligations. During the conference, Ricardo Rossello, the leading gubernatorial candidate in Puerto Rico joined us via video conference and spoke about his thoughts on the importance of working constructively with creditors to achieve long-term success. In his view that some of the debt related actions of the current administration are unlawful. We were very pleased that Mr. Rossello took the time to share his forward-looking vision with us. Finally, attendees heard that the federal government can do much more to help the people of Puerto Rico. For example, after enacting an oversight board in the District of Columbia in the mid-1990’s, Congress subsequently enacted a package of tax incentives to support sustainable growth using enterprise zones that included wage credits to employers, new homebuyer incentives and an increase in private activity bonds. Temporary employee tax reprieve would generate $620 per Puerto Rican employee annually and provide a meaningful tailwind for the island's economy. Finally, eliminating the disparity in Medicaid funding is essential given the challenges Puerto Rico's healthcare system is facing. The Medicaid matching rate for Puerto Rico is 55% while the maximum rate is 83% for many states, 70% for the District of Columbia. We highlighted these and other possible initiatives in Ambac's September 2 submission to the Congressional Task Force on Economic Growth in Puerto Rico in Washington DC led by Senator Hatch. The day after our revitalization conference Governor Padilla presented yet another version of his fiscal economic growth plans to the PROMESA oversight board. The outgoing governor's latest plan is yet another attempt by him and his advisors to distort Puerto Rico's true fiscal condition. The plans incredible assumption of revenue losses and continued increase expenses among many other flaws unfortunately continues the credibility gap that has prevented good faith conversations with the current governor and his advisors and has materially harmed Puerto Rico. We remain optimistic on Puerto Rico. We believe that with the new administration and the help of the oversight board, the Commonwealth will be able to surmount its current challenges, repay its obligations over time and return to growth. We look forward to working constructively with the oversight board and the new governor in resolving Puerto Rico’s liquidity issues and putting the island on a path to return to the capital market, growth and jobs in private sector, and long-term prosperity. As we approach the year end, I believe we’ve made great strides thus far this year in our strategic priority, including in liability management, loss mitigation, investment success, including in our own obligations the prosecution of our legal rights, the successful rehabilitation of the segregated account and expense management. To summarize a few of the highlights for the year-to-date, our overall risk exposure is down by $22 billion or 20% bringing our claims paying ratio to 15 to 1. We recovered nearly $1 billion in our RMBS litigation against JPMorgan and another $60 million in another RMBS related settlement and of course we continue the pursuit of our significant litigation against Bank of America as well as other possible claims. We continue to actively mitigate losses throughout the portfolio and take great pride in the leading position we’ve taken in the positive developments related to Puerto Rico’s financial condition. With regard to the ongoing rehabilitation of the segregated account, RMBS net par exposure is down thus far this year by 13% and student loan exposure has been reduced by another 38%. At the same time, our estimated gross expected future claims payments for RMBS have declined by 22% and for student loans by 46%. In addition, we purchased on the year thus far nearly $850 million at cost of AAC and segregated account in shorter issued securities. All at significant discounts and had yields well in excess of the average accretion of our liabilities. And of course we continue to support the rehabilitator in his ongoing determinations regarding the segregated account. Finally, we’ve made solid progress in our expense management efforts reducing ongoing operating expenses very significantly. All of this has contributed significantly in our ultimate goal of improving our claims paying ability for our policyholders and building book value for our shareholders. Through the first three quarters, book value is up $225 million or 13% and adjusted book value has increased by $330 million or 30% despite putting up a significant increase in our public finance reserves related predominately to our Puerto Rico related exposures. As important as these specific accomplishments what gives me confidence for the future is the heighted urgency and productivity with which our professionals are now approaching our asset liability management and risk reduction challenges. As we’ve elevated our activity and reduced headcount, our dedicated employees are being asked to work even harder and make even greater sacrifices than they have in the past. I am extremely grateful for their commitment and dedication. Our board also has been hard at work supporting me and the management team in all that we’ve achieved through the year and I thank each of them for their insight and dedication. And Of course, we very much appreciate the considerable support that we’ve continued to enjoy from our shareholders. While we recognize Ambac remains a somewhat complicated story, at our core we are an asset-liability management company whose principal mandate currently is managing down the large policy book at AAC accretively and efficiently and prudently deploying our assets in that process. Our large NOLs and tax receivable earnings from taxation and together with our expertise and other assets, provide for significant potential value creation in the future. I will now turn the call over to David Trick for a more detailed review of the financials.

Thank you, Nader, and good morning. Our strong third quarter performance is a result of positive contributions from multiple drivers including an increased and accelerated premiums earned, our loss and loss expense incurred benefit, higher investment income, significant expense reductions and improvements to differ [ph] product losses. As a result of these and other drivers, we generated net income of $101.5 million or $2.22 per diluted share in the third quarter, up over 72% compared to net income of $58.6 million or $1.29 per diluted share for the second quarter of 2016. Operating earnings in the third quarter were $148.1 million or $3.23 per diluted share, up over 27% compared to $115 million or $2.54 per diluted share in the second quarter. Since emergence from bankruptcy, we have generated over $1.6 billion of net income and over $3 billion of operating earnings. Turning now to some more specifics, premiums earned were $53.2 million during the third quarter and included $18.2 million of accelerated premiums versus only $5.1 million during the second quarter. This $13.1 million increase was driven by public finance calls of $3.1 billion net par, which increased $1.8 billion more than twofold compared to calls of $1.3 billion in the second quarter. During the third quarter, the financial guarantee insurance portfolio net par outstanding was reduced by a total of $8 billion or just over 8% to approximately $86.4 billion from $94.4 billion at the end of June. The change in the insured portfolio primarily related to total runoff in the public finance sector of $6.3 billion compared to $4 billion in the second quarter. We also reduced the structured and international finance sectors by $1.1 billion and $600 million respectively. Although the most distressed exposures tend to be the stickiest, we are also pleased to report that our adversely classified credits declined in the quarter by $600 million or just over 3% to $17.4 billion. At the end of the third quarter, our consolidated claims paying resources were $8.9 billion leaving us with a total claims paying ratio of 15 to 1. This compares favorably to our $8.8 billion of claims paying resources in a ratio of 17 to 1 at the end of June 2016. Losses incurred were a benefit of $69.2 million for the third quarter compared to a benefit of $52.5 million in the second quarter of 2016. There were three principal drivers to the third quarter incurred benefit. The first in Ambac UK incurred benefit of $43.7 million resulting from the impact of interest rates and an improved outlook for our risk remediation efforts. Secondly, the $38.7 million increase in the estimated value of our representation and warranty segregation recovery. And lastly, a student loan incurred benefit of $36.3 million resulting primarily from an improved outlook with regard to our risk remediation efforts. Net investment income increased $20 million sequentially to $90.9 million for the third quarter of 2016. The increase was driven by improved cash flow experienced in both AAC insured RMBS and ABS portfolios along with higher mark-to-market gains in the trading portfolio. Mark-to-market gains on invested assets classified as trading were $10.2 million in the third quarter of 2016 compared to $5.2 million in the second quarter of 2016. These improved mark-to-market results were attributable to both AAC and Ambac UK. During the third quarter of 2016, AAC invested assets were approximately $287 million in its insured bonds including RMBS, student loan bond, and Puerto Rico bonds. These RMBS purchases helped raise Ambac’s investment in owned deferred amounts including interest by about 4% to $1.5 billion or 41% of the total amount outstanding as of September 30, 2016. The fair value of consolidated investment portfolio increased $84.5 million from June 30, 2016 to $6.6 billion at September 30, 2016. This was primarily driven by the favorable total return performance across all sectors of the portfolio. At the end of September, the financial guarantee investment portfolio including Ambac UK had a long-term GAAP to book yield of 5.6% and stack book yield of 6%. Our investment portfolio strategy remains focused on generating the highest risk-adjusted returns for our shareholders while maintaining liquidity profile to satisfy our strategic and operational needs. Net losses reported in derivative product revenues for the third quarter of 2016 were $14.5 million which included a gain of $2.4 million associated with the macro hedge and $16.9 million of losses associated with the legacy customer swaps. The net loss for the third quarter was primarily driven by $14.8 million increase in the Ambac CVA. However given that we eliminate the impact of the CVA for non-GAAP measures, the derivative product results were a slight gain on operating earnings basis for the third quarter. As we have previously discussed, the macro hedge is positioned to benefit from rising interest rates as an economic hedge against interest rate exposure in the investment and financial guarantee portfolios including excess spread within the RMBS and student loan portfolios. We estimate that the cost of carry of the macro hedge is approximately $4 million to $5 million annually equivalent to about one week of segregation recovery. Segregation related to RMBS received in the third quarter was approximately $64 million. Our ongoing expense management initiatives became more visible during the third quarter of 2016 as we delivered a 23% or $6.5 million reduction to operating expenses to $21.5 million. Key factors driving improvement included a reduction in compensation to $13.9 million which was lower by $2.5 million primary as a result of the second quarter 2016 staff rightsizing actions including lower severance payments and accrual. Third quarter compensation expenses also included $1.3 million of postemployment expense, a decrease in activism defense fees of $2.7 million or 10% from total second quarter operating expenses and a reversal of $2.3 million of accruals due to the resolution of outstanding U.S. insurance tax matters. We remain focused on reducing our core operating expenses, but also anticipate that we’ll experience some level of volatility quarter-to-quarter associated with normal course operations and various initiatives including those related to the segregated account and our ongoing efforts towards the successful rehabilitation. Turning to taxes, the provision for income taxes in the third quarter was $15.3 million compared to $3.2 million for the second quarter. The third quarter provision included $12.3 million for Ambac UK taxes. At the end of September, we had $4 billion of NOLs outstanding including $1.4 billion at AFG and $2.6 billion at AAC. Year-to-date AAC has utilized NOLs in an amount that resulted in accrual of $19 million of tolling payments from AAC to AFG in the third quarter. We are pleased that our financial results this quarter reflect our progress in successfully executing upon our strategy. Positive results during the quarter drove stockholders equity of 6% to $1.9 billion or $42.32 per share and adjusted book value of more than 7% to over $1.4 billion or $32.12 per share at September 30. Since emergence three and a half years ago, we have delivered $1.6 billion increase in shareholders’ equity or $35.94 per share and $1.8 billion increase in adjusted book value or $39.35 per share. We’d now like to open the call for your questions.

Thank you. [Operator Instructions] And our first question comes from Andrew Gadlin from Odeon Capital. Your line is open.

Good morning guys.

Good morning.

I wanted to ask a couple of questions about the investment portfolio. I'm surprised to see that the cash balance increased by about $70 million quarter-over-quarter despite the fact that there was $50 million plus of claims paid in Puerto Rico is question one. And then number two, it looks like the concentration in AAC wrapped securities is up higher than it's ever been about 43%. Is there more to do and how the limitation that you have in terms of portfolio concentration figure in your ability to buy back more claims going forward?

Sure, Andrew. The increase in the portfolio was despite the payment in claims. The main drag on claim payments was Puerto Rico in the quarter as you know. The remainder of claim payments was relatively modest and neutral given the fact that we had such good segregation we see to get in the quarter. So the overall total return on the portfolio in the quarter was on annualized basis just over 7%. So in effect the combination of premiums coming in the door and the positive return on the portfolio more than offset the impact of claim payments in the quarter.

Andrew, can you repeat your second part of your question please?

Sure. Just looking at the operating supplements on page 13, I guess you've got the investment portfolio laid out and it looks like there's about $2.3 billion, $2.4 billion of AAC wrapped RMBS and student loans in the portfolio versus a total portfolio amount of about $5.58 billion in the financial guarantee portfolio. That works out to about 43% of the book invested in your own securities. That's a little higher than it's been ever. I’m just curious can you take it even hire? You talked about selectively buying more going forward. Is that possible at this point?

We do, Andrew, have some capacity left in the book. That portfolio generates a fair amount of cash flow every quarter and pays itself down which that cash can then be recycled. But the limits that we have imposed upon us with that portfolios have not previously been disclosed, but the benchmark where it sits today is around the benchmark where it's been granted a little bit higher but I would expect that nominal number to move up and down and around that zone. And I wouldn't say look at a few basis points one way or the other indicative of us losing capacity to buy more paper, and we have other means as we’ve talked about in the past in terms of increasing capacity including many other prospects of doing [indiscernible] type transaction to free up some of the RMBS cash flow in that portfolio on an accelerated basis.

Got it. Thanks. Just a question on the two main legal processes for the company right now, the early exit from rehab or achieving exit from rehab, what would be the timeline for actually having those conversations move forward? And is there anything going on right now?

Andrew, on that issues, I said in the prepared remarks we're doing everything we can to support the new Special Deputy Commissioner and the Rehabilitator in their efforts to evaluate the option. And I really - am not at liberty to say much more than that. We obviously support the possibility of the company being able to exit the rehabilitation process if there is a transaction that's acceptable to the Commissioner and rehabilitator, and acceptable to the holders of the effective debt. In the meanwhile, I think our job is to continue to build book value as we have and I think we're doing a pretty good job of it. And we’ll continue to work at that while the Commissioner and rehabilitator determine the options as it relates to the segregated account.

Okay. Thank you very much.

Sure.

Thank you. And our next question comes from Gary Ribe from Macro Holding. Your line is open.

Hello guys. Great job on everything.

Thank you.

I just had a quick question I know you guys has expired the authority to buyback warrants which I think is great. I just had a question on warrants versus the common stock from the NOLs. I think you guys have been public now little over three years. I don't know that if you have a material number. I'm not sure you guys are 5% owners. Can you talk just a little bit about maybe looking at – there is more liquidity and maybe able to get more done? The difference between a shift and a change in ownership for the rules I think you guys have some room there and there's a corridor for issuers to do share repurchases. So might you guys be able to move a little bit quicker but got some sort of common stock plan approved?

Gary, I'll start to answer and then David will support to the extent necessary. We're pleased that the board authorized an additional $10 million with the balance of what's left on the existing authorization, that gives us about $12.5 million. The warrants essentially trade by appointment, so we’ve been picking away at them as we can opportunistically. We are somewhat limited in terms of a stock buyback, unfortunately those who followed the story know that because of the 382 limitation on ownership and the fact that we have a whole host in excess of 4% and 4.5% shareholders a stock buyback would potentially inadvertently trip people over 5% and causes some issues with our excess carry forwards. The other way that we’ve approached our problem given our confidence in the company and the shared view that is accretion to be had here, is the very significant liability management program and the investment program that we’ve undertaken in the insured portfolio and in the investment book. So that obviously every time we buy securities back at a discount, it's got accretion to it and so were doing it in that manner. We're looking at some other opportunities as well as we speak but unfortunately we are limited in terms of an actual stock buyback.

Got it. Cool. Thank you very much. I also enjoyed seeing your Form 4S [ph] come across every now and again. So keep up the good work you guys are doing.

Thank you. Appreciate that.

Thank you. And our next question comes from Sean Lobo from Vulcan. Your line is open.

Hi, Sean.

Hello, good morning. How are you guys. As always, things are transparent and the details is very helpful for us from an investor perspective. I have two questions, the first is in Q1 you reported that within Ambac portfolio about $640 million in market value, it was invested pure claim bonds. Can you give us an update on what that is today?

The pure claim bond number is – in total, we own as I mentioned I think in my prepared remarks that $1.5 billion of our own deferred obligation and that's about 41% outstanding. So your question is how much of that is actual pure claim bonds. I don't have the number in front of me but I’m going to estimate its probably about $500 million or $600 million.

Gotcha. And then moving across a capital structure you guys have done it great job in terms of liability management. What sort of interesting is you guys are talking about – the focus here is liability management. At what point you also think about creditor creation value as a balance also to liability management?

Sean, I'm sorry creditor creation value? Just explain to me a little bit what you mean by that?

If you guys continue to successfully buy these back, it looks to be decent IRRs but at the same point now we think about liability management. But if the creditors that have been long-term supportive or both on credit and equity looking to sort of say we have an okay cushion, we can look to make all distribution.

Got you. Look I think we’ve created a lot of creditor accretion through our liability management program, right. Our claims paying ratio is now down 15 to 1, we are a much stronger company. There is still a fair amount of uncertainty both near-term and longer-term, and I think those are the kind of issues that this Special Deputy Commissioner or rehabilitator are evaluating as they think about options going forward and what durability will look like for the company in the long term. Again, as I said before in my prepared remarks, as it relates to the segregated account proceeding, the ultimate resolution of the claims there and any sort of increase in the IPP or any of those issues are squarely in the domain of the rehabilitator. We are doing everything we can to provide them information and support their process but it's their process and we are helping as much as we can.

Got it. And sorry – what is the [indiscernible] question, in terms of recap process, can you just give us a sense how many stakeholders you're in touch with and what portion of the pool they represent?

Yes, I can't really comment on that. The most recent active conversations have been the listening sessions that the Special Deputy Commissioner has had with the stakeholders, with the creditors in the segregated account and also perhaps in the general account. And we are not party to organize meetings that the company right now.

Okay. I'll jump back in queue guys. Thanks again for all your efforts and all your hard work. I appreciate it.

Thank you. [Operator Instructions] This concludes today Q&A session. I would now like to turn the call back over to President and CEO, Nader Tavakoli for closing remarks.

Thank you all for joining us on today's call and we look forward to speaking with you in the future.