October 17, 2019

Arch MI Secures Over $577 Million of Indemnity Reinsurance through Bellemeade Re Insurance-Linked Note Transaction

GREENSBORO, N.C.–()–Arch Mortgage Insurance Company (Arch MI) announced today that it has obtained $577,267,000 of indemnity reinsurance on a pool representing $7.2 billion of mortgages from Bellemeade Re 2019-4 Ltd., a special purpose reinsurer. The reinsurance is for a portfolio of MI policies linked to 113,180 loans issued by Arch MI and affiliates in 2019.

“Our efforts are supported by a wide range of private market investors that are attracted to Arch’s best in class pricing, asset selection and servicing of our mortgage insurance portfolio.”

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This Insurance-Linked Note (ILN) transaction was Arch’s fourth of 2019, marking the most ILN transactions ever conducted in a single year by a mortgage insurer. In total, Arch has issued 10 Bellemeade transactions, which have provided aggregate reinsurance coverage of over $4.7 billion.

Bellemeade Re 2019-4 Ltd. is funding its reinsurance obligations through the issuance of five classes of amortizing notes with 10-year legal final maturities.

The notes consist of the following five classes:

  • $144,317,000 class M-1A notes with a coupon equal to one-month LIBOR plus 140 basis points.
  • $144,317,000 class M-1B notes with a coupon equal to one-month LIBOR plus 200 basis points.
  • $126,277,000 class M-1C notes with a coupon equal to one-month LIBOR plus 250 basis points.
  • $144,317,000 class M-2 notes with a coupon equal to one-month LIBOR plus 285 basis points.
  • $18,309,039 class B-1 notes with a coupon equal to one-month LIBOR plus 385 basis points.

“This transaction represents Arch’s continued commitment to actively managing the risk in our U.S. mortgage insurance business,” said Jim Bennison, EVP, Alternative Markets for Arch Capital Group (U.S.) Inc. “Our efforts are supported by a wide range of private market investors that are attracted to Arch’s best in class pricing, asset selection and servicing of our mortgage insurance portfolio.”

About Arch MI

Arch MI, a wholly owned subsidiary of Arch Capital Group Ltd., is a leading provider of private insurance covering mortgage credit risk in the U.S. 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, visit archmi.com.

About Arch Capital Group Ltd.

Arch Capital Group Ltd., a Bermuda-based company with approximately $12.49 billion in capital at June 30, 2019, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.

For more information, visit archgroup.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]