Municipal bonds finance nearly three-quarters of all public infrastructure in the U.S., helping cities across the country invest in the future. Build America Mutual works with municipal bond issuers or member-issuers to maximize the safety and stability of investing in U.S. municipal bonds and affordably financing essential infrastructure like schools, water and sewer utilities, public buildings, roads, and more. That’s why Build America Mutual (BAM) is NLC’s preferred provider of financial guaranty insurance.
Since its 2012 launch, BAM has guaranteed more than $100 billion of bonds for more than 5,000 member-issuers from 48 states. BAM is rated AA with a Stable Outlook by S&P Global Ratings. BAM insurance delivers substantial interest cost savings for issuers of municipal bonds and durable protection against loss for municipal bond investors. As a mutual insurer, BAM is responsible to its members – the U.S. municipal bond issuers who have utilized BAM insurance for their bond sales. BAM member-issuers are represented on the Board of Directors.
Benefits to Cities, Towns and Villages
- Access a lower cost of financing public debt.
- Member-issuers benefit from the opportunity to apply a portion of their original bond insurance premium as a credit to reduce the cost of refinancing bonds in the future.
- A portion of a municipality’s payment to BAM is treated as its Member Surplus Contribution. The surplus contribution can be reused if the bonds are refinanced, saving approximately 50 percent over traditional insurance methods. Only the risk premium needs to be renewed.
- View transparent reporting through BAM credit profiles – publicly available summaries of the underlying financial and economic strength of each bond BAM insures. BAM Credit Profiles are available for free on the BAM website and are updated annually.
- The BAM GreenStar program is the only green bond verification designed exclusively for municipal bonds. BAM GreenStar bonds finance sustainable water and wastewater infrastructure, renewable energy, and energy-efficient buildings, and meet the requirements of the International Capital Market Association’s Green Bond Principles.
Commitment to the Public Sector
Owned 100% by policy-holding municipalities
Build America Mutual (BAM) is NLC’s preferred provider of financial guaranty insurance on debt for its member municipalities. Launched in July 2012, BAM delivers substantial interest cost savings for issuers of municipal bonds and durable protection against loss for municipal bond holders.
BAM’s underwriting activities are limited to guaranteeing bonds of fixed rate, fully amortizing debt. Its insurance is extended only to U.S. essential public purpose, municipal bonds.
In addition to interest cost savings, as a mutual insurer, BAM insured issuers have the right to:
- Receive future dividends over time when approved by the Board of Directors and subject to regulatory approval
- The option to pay only a 10-year risk premium up front at closing and annual premiums after 10 years if bonds are not refunded
- Reuse the Member Surplus Contribution portion of the fee for the life of any refunding issue
Questions about working with this partner?
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