Arch Mortgage Insurance Company (Arch MI) has obtained over $233 million of indemnity reinsurance on a pool representing approximately $32.4 billion of mortgages from Bellemeade Re 2023-1 Ltd., a special purpose reinsurer.
The coverage was obtained by issuing approximately $186 million in bonds and $46 million in direct reinsurance, Arch explained.
“This transaction largely covers a portfolio of MI policies issued by Arch MI and affiliates primarily from January 2023 through September 2023 and closed on Oct. 31,” the firm added.
The Mortgage Insurance-Linked Note (MILN) transaction is Arch’s first of 2023. Since the Bellemeade program began in 2015, Arch has completed 20 transactions that have secured over $9 billion in indemnity reinsurance.
You can read more about this transaction, and all others, in the catastrophe bond and insurance-linked securities Deal Directory of our sister publication, Artemis.
Artemis also has a range of related charts which analyse mortgage ILS issuance by year, alongside a mortgage ILS sponsor leaderboard.
Bellemeade Re 2023-1 Ltd. is funding its reinsurance obligations through the issuance of five classes of amortising notes with 10-year legal final maturities.
Pricing details for the four classes of offered notes are as follows:
$49,755,000 class M-1A notes with a coupon equal to one-month SOFR plus 2.20%.
$54,731,000 class M-1B notes with a coupon equal to one-month SOFR plus 4.25%.
$42,292,000 class M-1C notes with a coupon equal to one-month SOFR plus 4.85%.
$27,365,000 class M-2 notes with a coupon equal to one-month SOFR plus 5.65%.
$12,438,000 class B-1 notes with a coupon equal to one-month SOFR plus 6.70%.
Additionally, a total of $46,647,000 was placed with a panel of reinsurers.
Jennifer Weiss, VP of Structured Capital and Reinsurance for Arch MI, commented, “Our ability to secure such favourable pricing speaks to the strength of our business, especially when compared to other recent deals we’ve seen in the market.
“Bellemeade is a key element of our risk and capital management strategy. We are glad to see strong, continued support from both investors and reinsurers.”
