Arch MI secures over $203m of indemnity reinsurance through Bellemeade Re

Arch Mortgage Insurance Company (Arch MI) has obtained over $203 million of indemnity reinsurance on a pool representing approximately $30.5 billion of mortgages from Bellemeade Re 2024-1 Ltd., its Bermuda special purpose reinsurer.

This transaction reportedly covers a portfolio of MI policies issued by Arch MI and affiliates primarily from September 2023 through July 2024 and closed on August 15.

According to Arch MI, the coverage was obtained by issuing approximately $163 million in bonds and $41 million in direct reinsurance.

This mortgage insurance-linked note transaction is Arch’s first of 2024, Following one in October of 2023. Since the Bellemeade program began in 2015, Arch has completed 21 transactions that have secured over $9.7 billion in indemnity reinsurance.

Bellemeade Re 2024-1 Ltd. is said to be funding its reinsurance obligations through the issuance of five classes of amortizing notes with 10-year legal final maturities.

Pricing details for the five classes of notes are as follows:

$34,964,000 class M-1A notes with a coupon equal to one-month SOFR plus 2.15%.
$53,612,000 class M-1B notes with a coupon equal to one-month SOFR plus 3.20%.
$37,294,000 class M-1C notes with a coupon equal to one-month SOFR plus 3.95%.
$25,640,000 class M-2 notes with a coupon equal to one-month SOFR plus 4.60%.
$11,654,000 class B-1 notes with a coupon equal to one-month SOFR plus 5.55%.

As mentioned, Arch also secured almost $40.8 million in traditional mortgage reinsurance through a related transaction with a panel of reinsurers entered into at the same time.

Jennifer Weiss, VP of Structured Capital and Reinsurance for Arch MI, commented, “Bellemeade continues to be a key element of Arch’s risk and capital management strategy. Despite current market volatility, we are pleased with this execution.”

Read more about this Bellemeade Re 2024-1 Ltd mortgage insurance-linked note transaction, and all others in the catastrophe bond and insurance-linked securities Deal Directory of our sister publication, Artemis.

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