BAM seals collateralized reinsurance agreement with Fidus Re
New York-based Mutual insurer of US municipal bonds Build America Mutual (BAM) is expanding its claims-paying resources by $100 million through a collateralized reinsurance agreement with Fidus Re, a special-purpose insurer created solely to provide collateralized reinsurance protection to BAM.
"As a mutual insurer, BAM was designed to generate unparalleled capital strength to support its guaranty and benefit our investors and issuer members," said BAM CEO Seán McCarthy. "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."
BAM chairman Robert Cochran, added: "Having a stable and durable foundation of financial strength allows BAM to remain focused on our mission: Providing efficient capital markets access to US public sector issuers who finance essential public infrastructure, and serving municipal bond investors with durable ratings, transparency, and protection against default.
"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.
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BAM seals collateralized reinsurance agreement with Fidus Re
