NEW YORK--(BUSINESS WIRE)--S&P Global Ratings announced that it has affirmed Build America Mutual’s AA rating and stable outlook, the strongest rating S&P assigns to any active bond insurer.
“BAM is a mutual bond insurer writing business solely in the U.S. public finance market with a broad, well-diversified presence across the U.S.; its insured portfolio comprises primarily general obligation bonds for school districts and municipalities, which somewhat lessens the volatility of its insured portfolio,” S&P wrote in its report. In response to the COVID-19 pandemic, S&P performed a stress test on BAM’s portfolio and concluded that: “BAM's underwriting and risk-management guidelines result in an insured portfolio that does not reflect the overall U.S. municipal market and may perform better in a stressful economic scenario.”
“S&P’s analysis recognizes BAM’s ‘excellent capital and earnings’ and low-risk insured portfolio that consists exclusively of bonds from the safest sectors of the U.S. municipal market,” said BAM Chief Executive Officer Seán W. McCarthy. “As a mutual insurer, those strengths translate into a strong, durable guaranty for municipal bond investors and our issuer members.”
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 the official provider of bond insurance for the National League of Cities, and was launched in 2012 with initial capital provided by subsidiaries of White Mountains Insurance Group, Ltd. (NYSE:WTM)
Through March 31, 2020, BAM has insured more than $75 billion of municipal securities in more than 8,500 primary and secondary market transactions.