Build America Mutual Assurance Company, the first mutual bond insurer serving the U.S. municipal bond market, has expanded its presence and is now licensed to insure bonds in 11 additional states.
In addition to receiving its initial license in New York, the company also is now licensed in Arizona, Illinois, Michigan, North Carolina, North Dakota, Pennsylvania, South Dakota, Texas, Vermont, Virginia, and Wisconsin.
“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,” said Chairman Robert Cochran in a statement.
While now officially licensed in 12 states, the company has filed applications in all states and the District of Columbia and plans to be licensed nationwide very soon. “We believe the process is going very well and we intend to be licensed in all 50 states,” Cochran added.
The company is also able to write business in many states that permit an insurer to write business prior to be licensed. Those states are Alabama, Colorado, Delaware, Hawaii, Indiana, Kentucky, Maryland, Minnesota, Missouri, New Hampshire, New Jersey, Ohio, Rhode Island, South Carolina, Tennessee, and Utah.
BAM, which as a mutual insurer allows its insured issuers to be owners, was founded in July and is rated AA by Standard & Poor’s. At the end of September, the company insured its first bond issue, $10 million of York Suburban School District, Penn., general obligation bonds.
The company said it will continue to insure AA-minus and A-rated bonds up to $100 million and BBB rated bonds up to $75 million. It will insure only investment-grade revenue and general obligation bonds issued to fund essential government facilities and services.
“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,” Cochran added in a statement. “The progress we are making on the licensing front should enhance the growth of the company in 2013.”