What: Shares of MBIA Inc (NYSE:MBI) traded higher by nearly 15% after the market open and are now higher by about 12%.

So what: MBIA is getting a bid today thanks to an agreement between Puerto Rico's Electric Power Authority and some of its bondholders.

The agreement will result in a roughly 15% haircut for investors and replace some of the company's outstanding debt with lower-interest notes. The agreement is expected to save the utility about $700 million in principal and interest over the next five years, according to Bloomberg.

MBIA has insured a number of Puerto Rican municipal bonds; among these, PREPA bonds are its second-largest single exposure. The bond insurance company broke out its exposures in its quarterly filings, showing that it had insured roughly $2.1 billion in PREPA bonds and nearly $10 billion in Puerto Rican municipal bonds in total.

Bond

Debt Service Outstanding (millions)

Sales Tax Financing Corporation

$4,170

Electric Power Authority

$2,099

Commonwealth General Obligation

$1,573

Highway and Transportation Authority Transportation Revenue

$1,499

All others

$635

Total

$9,976

Source: Page 70 of MBIA's quarterly report.

Now what: Importantly, this is one of the first agreements between Puerto Rico and its bondholders, and only 35% of the bonds were represented in the agreement. Future agreements may result in larger haircuts to principal amounts or interest rates. But, at least for now, MBIA shareholders can breathe a little easier, having at least some idea of what the eventual losses might look like.