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June 30, 2017

BAM, White Mountains Announce Agreement That Will Accelerate BAM’s Long-Term Capital Growth

In completion of a long-term strategic initiative, Build America Mutual, the largest active municipal-only bond insurer, announced today that White Mountains Insurance Group will contribute $203 million of BAM surplus notes as permanent capital for HG Re, the captive reinsurer that provides first-loss protection for BAM’s insured portfolio. In addition, BAM and HG Re have made changes to their reinsurance treaty that will accelerate the growth in BAM’s statutory capital in future years.

The changes will have a long-term positive impact on BAM’s claims paying resources and capital adequacy, which BAM already estimates to be well above the level required for a triple-A rating under S&P Global Ratings’ bond insurance guidelines. Going forward, the accelerated growth in capital will improve BAM’s strong leverage ratios and provide BAM additional flexibility to insure larger transactions, because BAM’s single-risk limits are determined as a percentage of its total hard capital. The changes announced today were disclosed to S&P Global Ratings during the in-depth review process that culminated in S&P affirming BAM’s AA rating and Stable outlook on June 26th. The regulatory approvals necessary to implement the changes are expected to occur during the third quarter.

“White Mountains has been a fully supportive partner since BAM’s launch, and these steps reiterate their long-term commitment to our municipal-only, mutual insurer business model,” said BAM Chairman Bob Cochran.

“This additional permanent capital and BAM’s affirmed ratings from S&P position BAM to continue to grow and serve the needs of our issuer members and municipal bond investors,” said BAM CEO Seán W. McCarthy.

About Build America Mutual

BAM is a mutual bond insurance company operated for the benefit of its members – the 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.

Through June 16, 2017, BAM has insured more than $39 billion of municipal securities for more than 2,400 municipal issuers nationwide. Learn more at

For more information, please contact:

Michael Stanton, Head of Corporate Strategy and Communications 212-235-2575;