April 30, 2019

Arch MI Secures Over $621 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 $621,022,000 of indemnity reinsurance on a pool representing
$35.58 billion of mortgages from Bellemeade Re 2019-2 Ltd., a special
purpose reinsurer. This insurance-linked note (ILN) transaction provides
Arch MI with collateralized coverage for potential losses on a portion
of its mortgage insurance (MI) portfolio.

“These Bellemeade transactions are an important part of managing the
capital and risk positions of our mortgage business”

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The reinsurance is for a portfolio of MI policies linked to 143,840
loans issued by Arch MI and affiliates primarily during the second half
of 2018. The most senior M-1A class notes received an A rating from
Morningstar Credit Ratings, LLC.

This is Arch’s second 2019 ILN transaction, following Bellemeade 2019-1,
which was issued in March. In total, Arch has issued eight Bellemeade
transactions, which have provided aggregate reinsurance coverage of
approximately $3.5 billion.

Bellemeade Re 2019-2 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:

  • $133,076,000 class M-1A notes with a coupon equal to one-month LIBOR
    plus 100 basis points.
  • $133,076,000 class M-1B notes with a coupon equal to one-month LIBOR
    plus 145 basis points.
  • $168,563,000 class M-1C notes with a coupon equal to one-month LIBOR
    plus 200 basis points.
  • $164,127,000 class M-2 notes with a coupon equal to one-month LIBOR
    plus 310 basis points.
  • $22,180,000 class B-1 notes with a coupon equal to one-month LIBOR
    plus 410 basis points.

“These Bellemeade transactions are an important part of managing the
capital and risk positions of our mortgage business,” said Jim Bennison,
EVP, Alternative Markets for Arch Capital Group (U.S.) Inc. “Since our
initial Bellemeade issuance in 2015, we’ve seen a significant increase
in global investor interest in this asset class. We believe that ILN
transactions will continue to be a benefit to our entire industry.”

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.


Arch Capital Services Inc.
Greg Hare, 336-333-0416
[email protected]