S&P Global Ratings affirmed Build America Mutual’s AA rating with a stable outlook, citing the insurer’s “extremely strong” capital, “prudent” underwriting strategy, and a “well-developed strategic plan [that] ensures liquidity of BAM’s insured paper.”
In assigning the rating, S&P recognized BAM’s unique mutual structure, which supports BAM’s long-term financial stability because “BAM’s owners are focused on a stable, low-cost source of financial guarantee support rather than a high return on investment.” BAM focuses on insuring U.S. municipal bonds for essential public purposes and its members are the issuers who use its guaranty to save money on their bond sales. S&P noted that BAM does not have any exposure to issuers in Puerto Rico.
In addition, S&P noted that “BAM provides market participants significant transparency in its insured portfolio through its website,” where BAM publishes a Credit Profile for every bond it insures, and updates them annually.
“BAM’s mission is to serve as an industry utility that provides strong, durable ratings and enhanced transparency for small- and medium-sized issuers and the investors in their bonds,” said BAM Chief Executive Officer Seán W. McCarthy. “The structural and operating strengths S&P recognized are what allow us to fulfill that mission and keep expanding our insured portfolio and claims-paying resources.”
S&P has rated BAM AA, the highest rating it currently assigns to any active financial guarantor, since it was launched in 2012. Since then, BAM has insured more than $30 billion of municipal bonds in more than 3,500 primary- and secondary market transactions.
About Build America Mutual
Build America Mutual improves municipal bond liquidity and market access for issuers by providing municipal bondholders with an unconditional, irrevocable guaranty that principal and interest will be paid on schedule. As a mutual insurer, BAM is operated for the benefit of its members – which are, exclusively, the U.S. cities, counties, towns, and other public-sector entities that use BAM’s financial guaranty to lower their cost of borrowing. BAM is sponsored by the National League of Cities. Learn more at: http://buildamerica.com/mission/
For more information, please contact:
Michael Stanton, Head of Corporate Strategy and Communications 212-235-2575; firstname.lastname@example.org