BAM Announces Agreement to Expand Claims-Paying Resources by $100 Million
16 April 2018 - 10:00PM
Business Wire
Build America Mutual, the only mutual insurer of U.S. municipal
bonds, today announced it will be adding
to its strong internal capital growth and expanding
its claims-paying resources by $100 million through a
collateralized reinsurance agreement with Fidus Re Ltd., a
special-purpose insurer created solely to provide collateralized
reinsurance protection to BAM.
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BAM Chief Executive Officer Seán W.
McCarthy (Photo: Business Wire)
“As a mutual insurer, BAM was designed to generate unparalleled
capital strength to support its guaranty and benefit our investors
and issuer members,” said Seán W. McCarthy, Chief Executive Officer
of BAM. “We have delivered on that promise with capital strength
well in excess of rating agency and regulatory requirements. This
transaction, the first of its kind, is a creative way for us to
expand that surplus even further at an attractive price, which
speaks to the quality of BAM's insured portfolio and the strength
of BAM's position in the marketplace.”
“Having a stable and durable foundation of financial strength
allows BAM to remain focused on our mission: Providing efficient
capital markets access to U.S. public sector issuers who finance
essential public infrastructure, and serving municipal bond
investors with durable ratings, transparency, and protection
against default,” said BAM Chairman Robert Cochran. “This
foundation was built into our structure from day one when BAM was
organized as a mutual insurer, has continued as we have grown our
capital base organically, and is further enhanced today by the
Fidus transaction.”
The reinsurance protection is scheduled to become effective
during the second quarter of 2018.
About Build America Mutual
Domiciled in New York, BAM is a mutual bond insurance company
operated for the benefit of its members – cities, states and other
municipal entities – that use BAM’s financial guaranty to lower
their cost of borrowing. BAM is sponsored by the National League of
Cities, and was launched in 2012 with initial capital provided by
subsidiaries of White Mountains Insurance Group, Ltd. (NYSE:WTM).
Through March 31, 2018, BAM insured more than $46 billion of
municipal bonds in more than 5,500 primary and secondary-market
transactions, and delivered an estimated $550 million of savings
for its members. BAM-insured bonds are rated AA with a Stable
outlook by S&P Global Ratings.
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Build America MutualMichael Stanton, 212-235-2575Head of
Corporate Strategy and Communicationsmstanton@buildamerica.com
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