Build America Mutual's AA rating and stable outlook has been affirmed by Standard & Poor's for its financial strength.
"S&P's rating action recognizes BAM's progress in winning broad acceptance for our guaranty and the inherent strength of our capital model as a mutual insurer," Seán McCarthy, BAM's chief executive officer said in a press release.
This is currently the highest rating that S&P assigns to bond insurers.
The rating affirmation is a reflection of "the insurer's extremely strong capital adequacy and very strong competitive position," S&P wrote in its report.
With 85% of the two-year-old guarantor's credits holding an A rating or higher, S&P has recognized its high-quality insured portfolio as a credit strength. BAM does not have exposure to any of the Puerto Rico issuers, as by company policy BAM's organizing documents limit it to the 50 states and the District of Columbia.
"Both our members and municipal bond investors benefit from BAM's financial strength and unparalleled transparency, which includes publishing Obligor Disclosure Brief credit summaries for every transaction we insure," McCarthy said. The ODBs are available free of charge on BAM's corporate website.
The insurer's veteran management team combined with its low risk strategy and strong risk-management were determining factors for S&P's rating affirmation.
"We look forward to continuing to add issuer members, who use our guaranty to achieve more efficient and lower-cost access to the capital markets," McCarthy said.
