Arch MI Secures Over $653 Million of Indemnity Reinsurance from Insurance-linked Note Transaction

August 22, 2018

GREENSBORO, N.C.--(BUSINESS WIRE)--Aug 22, 2018--Arch Mortgage Insurance Company (“Arch MI”) announced today that it has obtained $653,278,000 of indemnity reinsurance from Bellemeade Re 2018-2 Ltd., a special purpose insurer. The reinsurance is for a portfolio of mortgage insurance (MI) policies issued by Arch MI and affiliates between April 2013 and December 2015. The senior M-1A class notes received ratings of AAA from Morningstar and A+sf from Fitch Ratings.

This transaction marks the third time Arch MI has accessed the capital markets for a risk transfer involving a mortgage insurance portfolio. Altogether, five Bellemeade transactions have been completed and have garnered nearly $2 billion of reinsurance protection for loans representing more than $192 billion of unpaid principal balance. This transaction’s $653,278,000 of reinsurance protection is believed to be the largest insurance-linked security (ILS) issue backed by a portfolio of MI policies.

As the Bellemeade transactions have increased in dollar value, they have also received additional interest from investors. This latest issue features 26 participants compared to 17 investors for the first Bellemeade transaction in 2015.

Bellemeade Re 2018-2 Ltd. is funding its reinsurance obligations through the issuance of four classes of amortizing notes with 10-year legal final maturities. This ILS transaction provides Arch with collateralized coverage from Bellemeade Re 2018-2 Ltd. for potential losses on a portion of its MI portfolio.

Andrew Rippert, CEO of Arch’s Global Mortgage Group said, “Arch has and will continue to be a leader and innovator in the insurance-linked securities space. These Bellemeade transactions provide us with flexibility in our overall mortgage insurance portfolio and allow us to effectively manage regulatory capital.” Rippert added, “This particular issue is notable for its size, the vintages of the reference pool and the high ratings assigned by the agencies.”

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, with significant operations in Walnut Creek, California, 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.

View source version on businesswire.com:https://www.businesswire.com/news/home/20180822005475/en/

CONTACT: Arch Capital Services Inc.

Greg Hare, 336-333-0416



SOURCE: Arch Mortgage Insurance Company

Copyright Business Wire 2018.

PUB: 08/22/2018 11:18 AM/DISC: 08/22/2018 11:18 AM


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