Arch Capital has successfully closed Bellemeade Re 2025-1 Ltd., the firm’s latest issuance of mortgage insurance-linked notes, which was priced at $199.3 million, while the firm also purchased a further $49,826,000 of mortgage reinsurance from a panel of reinsurers in tandem with this mortgage insurance-linked notes issuance.
As we previously reported, Arch Capital originally registered the Bellemeade Re 2025-1 Ltd. issuing entity in Bermuda at the end of August, and then earlier this month, a transaction had finally come to light.
This marks the first mortgage insurance-linked notes issuance we’ve seen since September 2024, so more than one year.
In fact, this marks the first mortgage ILS issuance sponsored by Arch since August 2024, when it successfully closed the issuance of Bellemeade Re 2024-1 Ltd., which was priced at $163.2 million.
As per Arch, the coverage was obtained by issuing approximately $199 million in bonds and $50 million in direct reinsurance.
Additionally, this Bellemeade Re 2025-1 issuance largely covers a portfolio of MI policies issued by Arch MI and affiliates primarily from July 2024 through September 2025 and closed on November 13.
Since the Bellemeade program began in 2015, Arch has successfully completed 22 transactions that have secured nearly $10 billion in indemnity reinsurance.
The five rated tranches of notes that Bellemeade Re 2025-1 is set to issue will be backed by reinsurance premiums, eligible investments, and related account investment earnings, relating to a pool of mortgage insurance policies linked to residential loans in each case.
The company disclosed the pricing details for the notes below:
- $39,859,000 class M-1A notes with a coupon equal to one-month SOFR plus 1.55%.
- $59,789,000 class M-1B notes with a coupon equal to one-month SOFR plus 2.50%.
- $42,706,000 class M-1C notes with a coupon equal to one-month SOFR plus 3.25%.
- $37,012,000 class M-2 notes with a coupon equal to one-month SOFR plus 3.90%.
- $19,929,000 class B-1 notes with a coupon equal to one-month SOFR plus 5.05%.
The notes, which all have a 10-year term, were rated by Morningstar DBRS as follows: Class M-1A was BBB (low)(sf), Class M-1B was BB (high)(sf), Class M-1C was BB (low)(sf), Class M-2 was B (high)(sf) and Class B-1 was B (sf).
As mentioned, Arch also secured a further $49,826,000 of mortgage reinsurance from a panel of reinsurers in tandem with this mortgage insurance-linked notes issuance.
Jennifer Weiss, VP of Structured Capital and Reinsurance for Arch MI, commented: “Bellemeade is an important part of Arch’s risk and capital management strategy, and we are excited to introduce an innovative amortization structure in this Bellemeade transaction that matches our capital requirements. We had strong investor engagement for this offering, and we are pleased with the ultimate execution.”
As a reminder, you can read all about the Bellemeade Re 2025-1 Ltd. mortgage insurance-linked securities transaction and every other mortgage ILS deal by filtering our extensive Artemis Deal Directory.
