Arch Mortgage Insurance Company (Arch MI) has secured over $639 million of indemnity reinsurance on a pool representing approximately $28.7 billion of mortgages from Bellemeade Re 2021-3 Ltd., a special purpose reinsurer.
The coverage was obtained by issuing approximately $508 million in bonds and $131 million in direct reinsurance, and covers a portfolio of MI policies issued by Arch MI from April through June 2021.
This mortgage insurance-linked note (MILN) transaction is Arch’s third of 2021 and the 17th Bellemeade transaction since the program’s inception in 2015.
“The closing of this transaction brings total protection procured through the Bellemeade program to $1.9 billion year to date, which is both a testament to the strength of the Bellemeade franchise and the market’s interest in the mortgage credit risk originated by Arch,” said Jim Bennison, EVP, Alternative Markets for Arch MI.
Bellemeade Re 2021-3 Ltd. is funding its reinsurance obligations through the issuance of six classes of amortizing notes with 10-year legal final maturities.
These include a $122,961,000 class of A2 notes, $104,926,000 class M-1A notes, $64,329,000 class M-1B notes, $81,397,000 class M-1C notes, $115,524,000 class M-2 notes, and $19,005,000 class B-1 notes.
Additionally, a total of $131,518,000 was placed with a panel of reinsurers.
“The introduction of an A2 class is the latest structural refinement in the Bellemeade program intended to better optimize capital in support of Arch’s mortgage insurance business,” Bennison explained.
