Build America Mutual Assurance Company (“BAM”) today launched the financial guaranty industry’s first mutual bond insurer. Rated AA/Stable by Standard & Poor’s Ratings Services (S&P) and regulated by the New York State Department of Financial Services, BAM is chartered to serve the U.S. municipal market. BAM’s doors are open for business, and it is actively considering transactions. BAM expects to write its first policy in September.
BAM is led by co-founders Robert P. Cochran, Managing Director and Chairman of the Board, and Seán W. McCarthy, Managing Director and Chief Executive Officer, both veterans of the bond insurance industry. Mr. Cochran co-founded Financial Security Assurance (FSA) in 1985 and was Chief Executive Officer from 1990 to 2009. Mr. McCarthy was President and Chief Operating Officer of FSA and subsequently held the same position at Assured Guaranty, following its acquisition of FSA.
As a mutual bond insurer, BAM is 100% owned by its policyholders, the municipal issuers using BAM’s insurance to lower their cost of funding. “BAM is a new and improved insurer of U.S. municipal bonds that delivers substantial interest cost savings to municipal bond issuers and durable protection against loss for their bondholders,” said the Co-Founders. “Based on our mutual structure, BAM will employ significantly lower risk leverage against capital and claims- paying resources than the traditional bond insurance model. As a result, BAM expects to maintain substantially greater capital resources than historically required for AAA ratings. BAM has built a strong foundation for ratings stability and robust claims-paying ability through a wide range of potential adverse circumstances.
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“We are also pleased to announce that BAM is sponsored by the National League of Cities. We believe this to be a strong endorsement of the value we can add to the municipal market and tangible proof of the demand for bond insurance, particularly at the retail level.”
“BAM’s model as a mutual is attractive to cities as it allows them to receive additional benefits as the program grows,” said Donald J. Borut, Executive Director, National League of Cities. “Also, BAM’s board members bring extensive experience in local government management and a thorough understanding of the economics and processes of local government. Their experience will provide insightful guidance and ensures that BAM’s focus remains on serving our nation’s local governments. BAM’s insurance will help cities gain access to new capital, at lower cost to make significant improvements in our local communities.”
BAM differs from traditional financial guaranty insurers
BAM’s unique corporate structure distinguishes it from traditional, legacy financial guarantors in three primary ways:
–BAM’s underwriting guidelines and credit policies permit BAM to insure only U.S. essential public purpose municipal issuers of fixed rate, fully amortizing debt. Further, BAM starts with a clean balance sheet, and it has no exposure to the asset classes that caused losses for bond insurers during the recent financial crisis;
–BAM’s mutual model generates capital growth to support growth in the insured portfolio. This eliminates the need to “go public” to raise capital, to drive earnings growth to satisfy equity markets, or to engage in mission creep by taking on risks outside of the core municipal market;
–In addition to its own strong capital base, BAM will have the benefit of collateralized first-loss reinsurance protection for losses up to the first 15% of par on each policy written.
BAM has strong capitalization and low leverage
BAM will be sizably capitalized on Day 1, with half a billion dollars in initial funding (plus $100 million pledged in the collateral trusts), and BAM’s capital will grow as its insured portfolio grows. Each municipal issuer that purchases insurance from BAM will become a “member” of BAM. The payment for a BAM policy includes a risk premium and a member surplus contribution to BAM, which will fund the growth of BAM’s claims-paying resources. BAM’s claims-paying resources are further strengthened by first loss reinsurance protection up to 15% of each insured issue, which is collateralized and held in trusts. The combination of BAM’s low risk business, low single risk limits and strong capital resources results in low operating leverage on an absolute and risk-adjusted basis.
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BAM provides policyholders with interest cost savings and other financial benefits
In addition to interest cost savings, BAM members have the right to 1) participate in future dividends on member surplus contributions, subject to regulatory approval; 2) to pay only a 10- year risk premium up front at closing and annual premiums after 10 years if bonds are not refunded; and 3) to re-utilize the member surplus contribution for the life of any refunding issue. Each of these elements of BAM membership is unique and will lower the long-term cost of public borrowing.
To ensure issuer representation in governance and policy making, BAM’s Board of Directors includes three external directors with extensive public finance experience and expertise: The Honorable Richard Ravitch, former Lieutenant Governor of the State of New York and currently Co-Chair of the New York Budget Crisis Task Force; The Honorable Edward G. Rendell, former two-term Governor of Pennsylvania and Mayor of Philadelphia; and Robert A. Vanosky, former Head of the Public Finance Division of RBC Dain Rausher Incorporated.
BAM offers the public finance market unprecedented transparency
In order to allow issuers and investors in BAM-insured bonds to monitor our financial strength, each quarter BAM will disclose claims-paying resources, leverage ratios, capital ratios and material information on its insured portfolio.
Additionally, to increase liquidity and transparency for BAM-insured bonds, BAM will publish obligor disclosure briefs on every bond issuer insured. These briefs are easily accessible by CUSIP, obligor, state and sector on BAM’s website. This information is also meant to assist broker-dealers in meeting disclosure rules for secondary market transactions.
BAM starts out with a deep bench of experienced managers
Joining Co-Founders Mr. Cochran and Mr. McCarthy are a senior team of highly experienced financial guaranty and municipal market professionals:
Scott C. Richbourg, BAM’s Head of Public Finance, formerly Executive Director and Manager of the Southern Group for Public Finance at Morgan Stanley and, before that, Managing Director of Public Finance at FSA;
Elizabeth “Beth” Keys, BAM’s Chief Financial Officer (CFO), joining from Guy Carpenter, where she was Vice President and CFO;
Alex Makowski, General Counsel, joining from Assured Guaranty and formerly FSA, where he was a Managing Director;
Suzanne Finnegan, Chief Underwriting Officer, formerly Executive Vice President at Wells Fargo Bank, N.A., where she was the Senior Credit Officer overseeing credit transactions in the Government Banking segment;
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Elizabeth “Betsy” Hill, Head of Surveillance, joining from FSA in a similar position;
Laura Levenstein, Chief Risk Officer, and formerly Senior Managing Director for Global Public, Project and Infrastructure Finance at Moody’s Investors Service;
David McIntyre, Chief Technology Officer and formerly Managing Director, Global Head of Development Standards and Control at BlackRock, Inc.; and
Betsy Castenir, Head of Corporate Communications, and formerly Managing Director of Corporate Communications at FSA and later Assured.
Key Facts
Rating
Insured Portfolio
Claims-Paying Resources
First Loss Protection Single Risk Limits Operating Leverage
About BAM
AA/Stable from Standard & Poor’s Ratings Services
U.S. essential public purpose municipal issuers (municipal entities qualifying under Section 115 of the Internal Revenue Code)
$600 million on Day 1, growing over time from member surplus contributions from municipal issuers and additions to the collateral trusts securing first loss reinsurance
15% first loss reinsurance on the par amount of each policy, secured by high quality collateral held in trusts
20% of BAM qualified statutory capital for A or higher-rated bonds; 15% for BBB
BAM starts today with no exposure against its capital. As municipal bond insurance exposure grows, BAM’s surplus and claims-paying resources will grow. Target operating leverage over the long term is 50-60:1.
Domiciled in New York, Build America Mutual Assurance Company is a mutual, monoline bond insurer of essential public purpose U.S. municipal bonds. As a mutual, the Company is 100% owned by its policyholders, the municipal issuers using BAM’s insurance to lower their cost of borrowing. BAM is rated AA/ Stable by S&P and regulated by the New York State Department of Financial Services. BAM is also a member of the National Association of Mutual Insurance Companies.
For further information, please contact:
Betsy Castenir, Head of Corporate Communications, 212-257-6148
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Governor Andrew M. Cuomo today announced that the Department of Financial Services (DFS) has licensed Build America Mutual Assurance Company (BAM) to operate as the first mutual bond insurer serving the U.S. municipal market. After receiving $600 million in initial financing, the company has secured a “AA” rating from Standard & Poor’s (with a stable outlook), which makes BAM the highest-rated bond insurer in the nation.
“New York is committed to fostering innovative new businesses. Build America will strengthen the economy and help create jobs not only in New York, but around the nation, by helping small local governments raise the funds they need to build necessary projects, while saving taxpayers’ money,” Governor Cuomo said.
Benjamin M. Lawsky, Superintendent of Financial Services, said, “Governor Cuomo is committed to ensuring that New York remains a vibrant financial services center. BAM’s unique business model will create dozens of jobs within the state. Further, the company should enable smaller and mid-sized communities to undertake essential capital projects that are good for the economy. The Department will closely monitor BAM to safeguard against the problems that the bond insurance market encountered during the height of the economic crisis”.
BAM has been established to provide bond insurance to the small and mid-sized municipal bond market and will focus on municipal bonds up to $75 million. BAM will insure only investment grade general obligation bonds or other revenue bonds issued to fund essential governmental facilities and services. The company will not insure structured securities, a practice which caused serious problems for bond insurers during the financial crisis. As a mutual insurer, the company will be owned by the issuers who are also its policyholders. BAM expects to issue its first policy in September 2012. BAM will be headquartered in New York City. The insurer will initially employ an estimated 40 people. It expects employment to grow to approximately 100 employees within two years.

Build America Mutual has filed its 2013 audited financial statements and fourth-quarter operating supplements with the National Association of Insurance Commissioners and posted the information in the Financial Information section of the company’s web site at: https://live-bambondscom.pantheonsite.io/financialinformation.
For more information, contact Richard Holzinger, Head of Investor Relations, at rholzinger@buildamerica.com or 212-235-2518.

Mutual bond insurer Build America Mutual Assurance Company (BAM) today announced the launch of a program to offer real- time quotes and electronic execution of its AA/Stable rated bond insurance on secondary municipal market trades on the TMC Bonds electronic trading platform.
“Through TMC Bonds, traders, institutional investors and retail trading desks now have the ability to purchase BAM secondary market insurance for bonds they are trading or already hold that qualify for BAM insurance,” said Seán W. McCarthy, Chief Executive Officer, BAM. “Our goal is to make BAM municipal bond insurance more broadly accessible, and we believe that electronic execution available on TMC Bonds will accomplish that.”
Thomas S. Vales, Chief Executive Officer of TMC Bonds, said: “With BAM offering insurance for municipal bonds over our system, we will continue to bring both greater transparency for market participants to get real-time insurance quotes and greater efficiency with one-click secondary insurance capability.” During the third quarter of 2013, TMC facilitated 31% of all inter-dealer trades in municipal securities.
BAM Posts Obligor Disclosure Briefs (ODBs) on Each Insured Transaction
BAM ODBs, which provide current credit information on every BAM-insured bond, are also available directly on the TMC platform for any already BAM-insured municipal bond. ODB information includes issue and series name; gross par insured
by CUSIP, maturity and coupon; sector designation and a summary of financial information with key ratios. Demographic data and economic data relevant to the obligor are also posted, when available. In addition to providing transparency on BAM-insured transactions, this information helps to ease compliance with disclosure rules for secondary market trades.
BAM has qualified a significant number of municipal credits for its secondary market insurance and will provide additional credits as new issues become available for trading. For issues not yet qualified, users can call BAM’s Secondary Market Desk at 212.235.2550.
Build America Mutual provides its guaranty on municipal bonds, exclusively, in core sectors of the market, including G.O., general fund, appropriation bonds and dedicated tax revenue bonds; utility and transportation revenue bonds; and bonds issued by public colleges and universities.
About BAM
Domiciled in New York, BAM is a mutual bond insurer of municipal securities, exclusively. BAM is rated AA/Stable by Standard & Poor’s Rating Services (S&P), the highest S&P rating in its industry, and is sponsored by the National League of Cities. For more information, go to www.buildamerica.com.
For more information, contact:
Michael Stanton
Head of Strategy and Corporate Communications 200 Liberty Street
New York, New York 10281
212-235-2575
C: 917-838-3548
mstanton@buildamerica.com

Build America Mutual Assurance Company (BAM) today announced its first insured transaction in the State of California — $11,965,000 of General Obligation Bonds, Election of 2012, Series A, for the Washington Unified School District in Fresno, California. BAM announced last week that it was licensed to operate in California.
“We are pleased to have done this transaction so quickly after being licensed in California and look forward to providing insurance for many California bond issues in the months and years ahead,” said Sheelagh Flanagan, BAM’s Head of Public Finance, West. BAM serves California issuers out of its Western Regional Office in San Francisco.
Proceeds of the transaction will be used to finance the construction, renovation modernization and equipping of school facilities. The underwriter on the transaction is PiperJaffray and the financial advisor is Fieldman, Rolapp & Associates.
About BAM
Domiciled in New York, BAM is a mutual monoline insurer of municipal bonds, exclusively. As a mutual bond insurance company, BAM is 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 rated AA/Stable by Standard & Poor’s Ratings Services and is sponsored by the National League of Cities.
For further information, please contact:
Betsy Castenir, Head of Corporate Communications 212-257-6148 or 917-940-2462

Build America Mutual Assurance Company (BAM) announced today that the Florida Office of Insurance Regulation has approved its license to operate in the State of Florida. With the Florida approval, BAM is now licensed in 49 states and the District of Columbia.
Robert P. Cochran, Chairman of BAM, said: “We look forward to working with Florida municipalities and their financial advisors to help them achieve increased market access and lower interest rates on their municipal bonds through our guaranty. As mutual members of BAM, Florida municipalities will also have the right to receive future dividends from BAM and to a premium credit in the event of a refunding of an insured issue.
“We are also pleased to note that, with the addition of our Florida license, we are very close to completion of our nationwide insurance licensing project.”
Florida League of Cities Director of Insurance & Financial Services Jeannie Garner said: “Access to a new mutual bond insurer, such as Build America Mutual, provides a valuable tool to assist local governments in Florida by lowering borrowing costs. Lower costs will, in turn, help critical capital projects move forward more quickly and ultimately speed up the path to economic recovery.”
ABOUT BAM
Domiciled in New York, BAM is a mutual insurer of municipal bonds, exclusively. As a mutual bond insurance company, BAM is 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 rated AA/Stable by Standard & Poor’s Rating Services (S&P), the highest S&P rating in our industry, and is sponsored by the National League of Cities.
For additional information, please contact:
Betsy Castenir
Head of Corporate Communications Build America Mutual 212-257-6148
C: 917-940-2462

Build America Mutual Assurance Company (BAM or the Company) today announced that since receiving its initial license in the State of New York, the Company has secured licenses in an additional 11 states and expects approval in a number of others before year-end. BAM is now licensed in Arizona, Illinois, Michigan, New York, North Carolina, North Dakota, Pennsylvania, South Dakota, Texas, Vermont, Virginia and Wisconsin.
Robert P. Cochran, Chairman of BAM, said: “The states that we have been licensed in represent a significant portion of new municipal offerings nationwide and provide BAM with the opportunity to begin to ramp up our underwriting.
“Our goal, of course, is to be licensed nationwide, and with our acceptance in the National Association of Insurance Commissioners (NAIC) coordinated licensing application review program (REACAP), we expect continued approval of licenses.”
BAM has filed applications in all states and the District of Columbia. While pursuing these licenses, BAM is permitted to write business in many states that have enacted statutes that, subject to fulfilling certain conditions, may permit an insurer to write business prior to being licensed. These states include Alabama, Colorado, Delaware, Hawaii, Indiana, Kentucky, Maryland, Minnesota, Missouri, New Hampshire, New Jersey, Ohio, Rhode Island, South Carolina, Tennessee and Utah.
“We are pleased with the progress we have made since our launch earlier this year and believe there is significant demand for BAM’s financial guaranty, particularly among small to medium size issuers of general obligation and essential public purpose revenue bonds, Mr. Cochran added. “The progress we are making on the licensing front should enhance the growth of the company in 2013.”
Domiciled in New York, BAM is a mutual, monoline bond insurer of municipal bonds exclusively. The first mutual bond insurance company, BAM is operated for the benefit of its issuer members –the cities, states and other municipal entities—that use BAM’s financial guaranty to lower their cost of borrowing. BAM is rated AA/Stable by Standard & Poor’s Ratings Services and is sponsored by the National League of Cities.
For more information, contact:
Betsy Castenir
Head of Corporate Communications 212-257-6148 bcastenir@buildamerica.com
Richard G. Holzinger
Head of Investor Relations 212-235-2518 rholzinger@buildamerica.com

Build America Mutual today announced four new hires and internal moves to enhance the underwriting and new business efforts of its growing municipal bond insurance business, according to Seán W. McCarthy, Managing Director and Chief Executive Officer of BAM.
Bryan R. Baebler joins BAM as Vice President, Capital Markets with responsibility for BAM’s competitive and negotiated business. He joins from Barclays, where he was a Vice President on the Municipal Primary Syndicate Desk.
Moving from Assured Guaranty to BAM are: Brian Siper, who joins the Legal Department as Associate Counsel, and Andrew Bevan, who joins as a Vice President in the Public Finance, East Group. Mr. Siper was formerly Counsel at Assured Guaranty, and Mr. Bevan was formerly a Managing Director in Assured’s Sydney, Australia office.
Kathryn E. Byrnes also joins BAM as Vice President in the Corporate Communications Department. She joins from Marsh, Inc., where she was a Vice President and Communications Manager.
Additionally, Elizabeth (Betsy) Hill has become BAM’s Deputy Credit Officer. Formerly she was the Company’s Head of Surveillance. Filling her previous role is Michael Weinstein, who was Vice President of Surveillance.
“These additions and promotions will significantly add to BAM’s new business effort and operational strengths as we continue to expand our municipal financial guaranty business,” said Mr. McCarthy. BAM currently has approximately 60 employees at its New York headquarters and San Francisco offices.
About BAM
Domiciled in New York, BAM is the first mutual monoline insurer of municipal bonds, exclusively. As a mutual bond insurance company, BAM is 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 rated AA/Stable by Standard & Poor’s Ratings Services and is sponsored by the National League of Cities. BAM’s website is buildamerica.com.
For further information, please contact:
Betsy Castenir, Head of Corporate Communications 212.257.6148
bcastenir@buildamerica.com

Build America Mutual Assurance Company (BAM or the Company), the first mutual municipal bond insurer, today announced that it has joined the Securities Industry and Financial Markets Association (SIFMA) as an Associate Member.
“We’re pleased to join SIFMA,” said Seán W. McCarthy, Managing Director and Chief Executive Officer of BAM. “We believe SIFMA plays an important role in the municipal market we serve and that our membership will allow us to contribute to its efforts to support a strong municipal industry.”
Launched in July 2012, BAM’s mission is to deliver substantial interest cost savings for issuers of municipal bonds and durable protection against loss for municipal bondholders. Owned by its policyholders—the cities, states and other municipal entities that use its guaranty—BAM’s mutual structure and business plan provide extremely strong capital and claims-paying resources designed to maintain the highest available ratings and strong investor confidence.
BAM is chartered to insure municipal bonds, exclusively, and strives to provide the municipal industry with the highest level of transparency in its operations and the bonds it insures. Regarding the latter, BAM posts Obligor Disclosure Briefs (ODBs) on every bond it insures on its website www.buildamerica.com. Accessible by CUSIP, obligor, state or sector, the ODBs assist broker-dealers in meeting disclosure rules for secondary market issues.
About BAM
Domiciled in New York, BAM is a mutual monoline insurer of primary and secondary municipal bonds, exclusively. BAM is rated AA/Stable by Standard & Poor’s Ratings Services and is sponsored by the National League of Cities.
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About SIFMA
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA’s mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
For further information, please contact:
Betsy Castenir
Head of Corporate Communications 212-257-6148
C: 917-940-2462 bcastenir@buildamerica.com