Arch Mortgage Insurance Company (Arch MI) has secured more than $203 million in indemnity reinsurance through a transaction with Bellemeade Re 2024-1 Ltd, a special purpose reinsurance company.

Arch Mortgage Insurance Company, a leading mortgage insurance company headquartered in Greensboro, North Carolina, is licensed to write mortgage insurance in all 50 states, the District of Columbia and Puerto Rico. Its reinsurance covers a portfolio of approximately $30.5 billion in mortgages. This coverage was achieved through the issuance of approximately $163 million in bonds and $41 million in direct reinsurance.

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The transaction primarily includes mortgage insurance policies issued by Arch MI and its affiliates from September 2023 to July 2024. The transaction was completed on August 15.

This transaction marks Arch MI’s first issuance of mortgage insurance-linked notes (MILNs) in 2024. Since the inception of the Bellemeade program in 2015, Arch MI has completed 21 such transactions, acquiring more than $9.7 billion in indemnified reinsurance.

Bellemeade Re 2024-1 Ltd. will fulfill its reinsurance obligations through the issuance of five classes of callable notes, each with final statutory maturities of 10 years.

DBRS Morningstar has rated the bonds, assigning a BBB (low) (sf) rating to the M-1A bonds, BB (high) (sf) to the M-1B bonds, BB (low) (sf) to the M-1C bonds, B (high) (sf) to the M-2 bonds, and B (sf) to the B-1 bonds.

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The M-1A Notes are $34,964,000 in principal and carry a one-month SOFR plus 2.15%. The M-1B Notes are $53,612,000 in principal and carry a one-month SOFR plus 3.20%. The M-1C Notes are $37,294,000 in principal and carry a one-month SOFR plus 3.95%.

The M-2 bonds have a total value of $25,640,000 and a one-month SOFR plus coupon rate of 4.60%. Finally, the B-1 bonds have a total value of $11,654,000 and a one-month SOFR plus coupon rate of 5.55%. In addition to these bonds, a total of $40,793,000 has been placed with a group of reinsurers.

The Bellemeade program continues to play a key role in the company’s risk and capital management strategy, said Jennifer Weiss, vice president of structured capital and reinsurance at Arch MI.

She also noted that despite the current market conditions, the deal was successfully executed.

Arch MI is a subsidiary of Arch Capital Group Ltd and a provider of private mortgage insurance in the United States, offering protection against mortgage credit risk.

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