Arch Capital, via its Arch Mortgage Insurance unit, has confirmed the issuance of the almost $163.2 million in mortgage insurance-linked securities that we had first reported on more than a week ago, while also saying that it purchased almost $40.8 million in traditional reinsurance alongside them.In total, Arch Mortgage Insurance secured over $203 million in mortgage reinsurance protection and has now been successful as the first sponsor of mortgage insurance-linked notes since November 2023.As we reported on August 5th, Arch Capital was attempting to reopen the market for mortgage insurance-linked securities (ILS) with the first issuance of mortgage insurance-linked notes seen in 2024.The last Bellemeade Re mortgage insurance-linked notes issuance before this was in October 2023, which was Arch’s first deal in a year at that time.

As we said, mortgage insurers had shied away from the securitized markets for sourcing reinsurance during a period of capital markets volatility, while interest rates and a need to pay investors higher spreads had also been a driver of the slowdown seen.But, as well as that, changes to rating methodologies meant that mortgage ILS deals were not delivering the capital relief previously enjoyed, which resulted in a wave of early redemptions of mortgage ILS notes and brought the market to a halt.Now, Arch Capital has been successful with a first mortgage ILS deal for quite a while and the company is clearly pleased to be back.

“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,” Jennifer Weiss, VP of Structured Capital and Reinsurance for Arch MI explained.The $203 million of indemnity reinsurance secured covers a pool representing approximately $30.5 billion of mortgages.

The reinsurance was all secured via Bellemeade Re 2024-1 Ltd., the special purpose reinsurer, with the coverage obtained by issuing the approximately $163 million in bonds and $41 million in direct reinsurance secured from a panel of reinsurers, Arch said.Since the Bellemeade program began in 2015, Arch has completed 21 transactions that have secured over $9.7 billion in indemnity reinsurance..

The company disclosed the pricing details for the notes, seen below: You can read all about this mortgage insurance-linked securities transaction and every other mortgage ILS deal by filtering our extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.