ALBANY, N.Y., July 23 -- The New York State Department of Financial Services issued the following news release:
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.
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