Arch’s mortgage insurer obtains $233m indemnity insurance

Arch Mortgage Insurance Company has obtained over $233 million of indemnity reinsurance on a pool representing approximately $32.4 billion of mortgages from special purpose reinsurer Bellemeade Re 2023-1.

Arch MI, the mortgage insurance subsidiary of Bermuda-based Arch Capital, said the coverage was obtained by issuing approximately $186 million in bonds and $46 million in direct reinsurance.

“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 October 31,” the company said in a statement.  

“This 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.”

Bellmeade Re is funding its reinsurance obligations by issuing five lasses of ten-year amortised notes which ratings from DBRS Morningstar ranging from BBB to B with coupons ranging from secured overnight financing rate (SOFR) plus 2.2% to SOFR plus 6.7%.

“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,” said Jennifer Weiss, VP of Structured Capital and Reinsurance for Arch MI. “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.”