Arch MI secures over $ 616 million in indemnity reinsurance through Bellemeade Re Insurance-Linked Notes transaction and related reinsurance | Companies


Arch Mortgage Insurance Company (Arch MI) announced that it had acquired Bellemeade Re 2021-2 Ltd. Coverage was achieved through the issuance of approximately $ 523 million in bonds and $ 93 million in direct reinsurance. This transaction essentially includes a portfolio of MI policies issued by Arch MI and affiliates from December 2020 to March 2021.

This Mortgage Insurance-Linked Note (MILN) transaction is Arch’s second in 2021 and the 16th Bellemeade transaction since the program launched in 2015. This is the second Bellemeade transaction to use the Secured Overnight Financing Rate (SOFR ) used as the reference rate for pricing the London Inter-Bank Offered Rate (LIBOR).

Bellemeade Re 2021-2 Ltd. Funds its reinsurance obligations by issuing five classes of amortizing bonds with a statutory 10-year final maturity.

The senior bond class M-1A received a rating of A1 from Moody’s Investor Service (Moody’s) and BBB (high) from DBRS Morningstar. The M1B bond class received a Baa1 from Moody’s and BBB from DBRS Morningstar. The M-1C, M-2 and B-1 were rated Baa3, B1 and B3, respectively, by Moody’s. These three classes were not rated by DBRS Morningstar. Additionally, Arch created a B2 class of notes for this transaction that is not currently issued.

The price details for the five grade classes offered are listed below:

  • $ 194,532,000 Class M-1A Notes with a coupon equal to one month SOFR plus 120 basis points.
  • $ 93,334,000 Class M-1B Notes with a coupon equal to one month SOFR plus 150 basis points.
  • $ 97,265,000 Class M-1C Notes with a coupon equal to one month SOFR plus 185 basis points.
  • $ 105,704,000 Class M-2 Notes with a coupon equal to one month SOFR plus 290 basis points.
  • $ 31,972,000 Class B-1 bonds with a coupon of one month SOFR plus 415 basis points.

A total of $ 93,214,000 was placed with a panel of reinsurers.

“Executing this transaction represents the broadest investor participation at the best price for current exposure in the history of the Bellemeade program,” said Jim Bennison, EVP, Alternative Markets at Arch MI. “We believe investors have concluded that the risks associated with the COVID-19 pandemic are behind us.”

About Arch MI

Arch MI, a wholly owned subsidiary of Arch Capital Group Ltd., is a leading provider of personal insurance for mortgage credit risks in the United States. Arch MI, headquartered in Greensboro, North Carolina, mission is to protect lenders from credit risk while expanding the opportunities of responsible home ownership to qualified borrowers. Arch MI’s premier mortgage insurer, Arch Mortgage Insurance Company, is licensed to take out mortgage insurance in all 50 states, the District of Columbia and Puerto Rico. Visit for more information.

About Arch Capital Group Ltd.

Arch Capital Group Ltd., a publicly traded Bermuda tax-exempt company with approximately $ 15.8 billion in capital as of March 31, 2021, provides insurance, reinsurance and mortgage insurance worldwide through its wholly-owned subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe haven for forward-looking statements. This press release, or any other written or oral statement made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may contain forward-looking statements that reflect our current views with respect to future events and financial performance. All statements other than historical facts contained in this press release or incorporated herein by reference are forward-looking statements.

Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “look ahead,” “believe” or “continue” their negation or variations or similar terminology. Forward-looking statements contain our current assessment of risks and uncertainties. Actual events and results could differ materially from those express or implied in these statements. A non-exclusive list of important factors that could cause actual results to differ materially from those shown in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; Pricing and political maturity trends; Fluctuations in the actions of rating agencies and the company’s ability to maintain and improve its ratings; Investment performance; the loss of key personnel; the adequacy of the company’s loss reserves, the severity and / or frequency of claims, claims ratios that are above expectations and the adverse development of claims and / or claims cost liabilities; greater frequency or severity of unpredictable natural and man-made disaster events, including pandemics such as COVID-19; the effects of acts of terrorism and war; Changes in regulations and / or tax laws in the United States or elsewhere; the company’s ability to successfully integrate, establish and maintain operations and integrate with existing operations the businesses that the company has acquired or may acquire; Changes in accounting policies or guidelines; material differences between actual and expected ratings for guarantee funds and mandatory pooling arrangements; The availability and cost of reinsurance to the company to manage the gross and net risks of the company; failure of others to meet their obligations to the company; Changes to the method used to determine the London Interbank Offered Rate (“LIBOR”) and the possible substitution of LIBOR and other factors identified in the Company’s filings with the US Securities and Exchange Commission.

The above review of important factors should not be considered exhaustive and should be read in conjunction with other warnings contained here or elsewhere. All subsequent written and oral forward-looking statements that are attributable to us or to persons acting on our behalf are expressly restricted in their entirety by this warning notice. The company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

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CONTACT: Greg Hare, 336-333-0416

Arch Capital Services LLC.

[email protected]



SOURCE: Arch Capital Group Ltd.

Copyright Business Wire 2021.

PUB: 06/17/2021 11:50 am / DISC: 06/17/2021 11:51 am

Copyright Business Wire 2021.

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