Build America Mutual Assurance Co. hopes to start insuring municipal bonds by the end of June, according to co-founder Sean McCarthy.
The insurer plans to attain double-A ratings from Standard & Poor’s and Moody’s Investors Service, McCarthy said. It will not start up without a double-A rating.
The company will serve small issuers with triple-B and single-A ratings, McCarthy said.
McCarthy, Robert Cochran and several others are forming Build America as a mutual insurance company. The company will be 100% owned by participating municipalities, McCarthy told an audience at the Tri-State Area Public Finance Conference Monday.
The company will have a bias to the accumulation of capital, he said. The company wants to have capitalization exceeding triple-A levels.
Those involved with starting the company have a great deal of bond insurance experience, McCarthy said. The company will have strong corporate governance with no ability to change its fundamental operating methods.
It will be a monoline insurer regulated by articles 41 and 69 of New York State’s code.
In April 2011, Cochran and McCarthy founded Hudson Greenwich Partners LLC in New York City. The firm says it aims to make public finance more efficient.
