Arch MI Secures Over $621 Million of Indemnity Reinsurance through Bellemeade Re Insurance-Linked Note Transaction

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    GREENSBORO, N.C.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/LoanOfficers?src=hash” target=”_blank”gt;#LoanOfficerslt;/agt;–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.

    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.

    Contacts

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