GREENSBORO, N.C.–(BUSINESS WIRE)–Arch Mortgage Insurance Company (“Arch MI”) announced today that it has
obtained $341,790,000 of indemnity reinsurance on a pool representing
nearly $23 billion of mortgages from Bellemeade Re 2019-1 Ltd., a
special purpose reinsurer. This insurance-linked security (ILS)
transaction provides Arch MI with collateralized coverage for potential
losses on a portion of its mortgage insurance (MI) portfolio.
“Those policies, plus the pre- and post-crisis collateral in
the pool, resulted in a transaction that was very appealing to investors
and demonstrates Arch’s continued efforts to creatively manage capital
and risk positions in our mortgage business.”
The reinsurance is for a portfolio of MI policies issued by Arch MI and
affiliates through 2015. More than 70% of the policies covered in the
transaction were issued prior to 2009. The most senior M-1A class notes
received an A- rating from Morningstar Credit Ratings, LLC.
This is Arch’s first 2019 ILS transaction in what has become a
programmatic issuance from Arch MI, which conducted three Bellemeade
transactions garnering $1.534 billion of reinsurance protection for
loans representing more than $136 billion of unpaid principal balance in
2018. This transaction is notable in that nearly half the covered
mortgages have been modified under GSE or servicer modification programs.
Bellemeade Re 2019-1 Ltd. is funding its reinsurance obligations through
the issuance of four classes of amortizing notes with 10-year legal
final maturities.
“This subject portfolio is unique in that it contains policies covering
loans originated during the crisis, some of which have been modified,”
said Jim Bennison, EVP, Alternative Markets for Arch Capital Group
(U.S.) Inc. “Those policies, plus the pre- and post-crisis collateral in
the pool, resulted in a transaction that was very appealing to investors
and demonstrates Arch’s continued efforts to creatively manage capital
and risk positions in our mortgage business.”
About Arch Mortgage Insurance Company
Arch Capital Group Ltd.’s U.S. mortgage insurance operation, Arch MI, is
a leading provider of private insurance covering mortgage credit risk.
Headquartered in Greensboro, North Carolina, Arch MI’s mission is to
protect lenders against credit risk, while extending the possibility of
responsible home ownership to qualified borrowers. Arch MI’s flagship
mortgage insurer, Arch Mortgage Insurance Company, is licensed to write
mortgage insurance in all 50 states, the District of Columbia and Puerto
Rico. For more information, please visit archmi.com.
Cautionary Note Regarding Forward-looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe
harbor” for forward−looking statements. This release or any other
written or oral statements made by or on behalf of Arch Capital Group
Ltd. and its subsidiaries may include forward−looking statements, which
reflect our current views with respect to future events and financial
performance. All statements other than statements of historical fact
included in or incorporated by reference in this release 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,” “anticipate,” “believe” or “continue” or their negative or
variations or similar terminology. Forward−looking statements involve
our current assessment of risks and uncertainties. Actual events and
results may differ materially from those expressed or implied in these
statements. A non-exclusive list of the important factors that could
cause actual results to differ materially from those in such
forward-looking statements includes the following: adverse general
economic and market conditions; increased competition; pricing and
policy term trends; fluctuations in the actions of rating agencies and
our ability to maintain and improve our ratings; investment performance;
the loss of key personnel; the adequacy of our loss reserves, severity
and/or frequency of losses, greater than expected loss ratios and
adverse development on claim and/or claim expense liabilities; greater
frequency or severity of unpredictable natural and man-made catastrophic
events; the impact of acts of terrorism and acts of war; changes in
regulations and/or tax laws in the United States or elsewhere; our
ability to successfully integrate, establish and maintain operating
procedures as well as integrate the businesses we have acquired or may
acquire into the existing operations; changes in accounting principles
or policies; material differences between actual and expected
assessments for guaranty funds and mandatory pooling arrangements;
availability and cost to us of reinsurance to manage our gross and net
exposures; the failure of others to meet their obligations to us; and
other factors identified in our filings with the U.S. Securities and
Exchange Commission.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with other cautionary
statements that are included herein or elsewhere. All subsequent written
and oral forward−looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by these
cautionary statements. We undertake no obligation to publicly update or
revise any forward−looking statement, whether as a result of new
information, future events or otherwise.
Contacts
Arch Capital Services Inc.
Greg Hare, 336-333-0416
[email protected]