A new municipal bond insurer is in the early stages of setting up operations.
Build America Mutual Assurance Co. published a public notice Wednesday.
The “mutual insurance corporation” is to be based in New York City.
Build America’s founders are Robert Cochran, Sean McCarthy, Laura Levenstein and Cheryl Lavery of New York City; Elizabeth Hill of Manhasset, N.Y.; David McIntyre of Fanwood, N.J.; Raymond Barrette of Sunapee, N.H.; G. Manning Rountree of Lyme, N.H.; and Allan Waters of Hanover, N.H.
Cochran and McCarthy both have extensive experience in muni bond insurance. Cochran co-founded Financial Security Assurance in 1985 and was chief executive officer from 1990 to 2009. Assured Guaranty bought FSA in 2009.
McCarthy joined FSA in 1988 and ultimately became its president. He also served as chief operating officer of Assured Guaranty from July 2009 to March 2011.
Cochran and McCarthy founded Hudson Greenwich Partners LLC in April. The New York-based firm says it will work on making public finance more efficient.
When asked about Build America, Cochran said, “It’s a big project but it will take a while.” He declined to offer any further comment.
Before the financial crisis disrupted the credit enhancement industry there were several triple-A rated insurers competing in the municipal market, insuring about half of the new-issue market by par value in any given year.
Several of the monoline insurance companies expanded into insuring real-estate-backed and asset-backed securities, and experienced severe losses when real estate values plummeted. As a result the insurers lost their triple-A ratings, effectively stopping them from insuring munis.
Currently only Assured Guaranty Ltd. is offering new insurance for muni bonds, enhancing about 7% of new-issue par value.
