BAM Mutual launches in Australia to insure key infrastructure bonds

BAM Mutual has announced the launch of its bond insurance services in Australia, targeting energy transition and social infrastructure projects.

The company, positioned as the only mutual bond insurer focusing on reducing debt costs for essential infrastructure, aims to deliver key projects sooner and with greater cost efficiency.

The company will soon offer its insurance for bonds and loans financing projects in Australia and New Zealand. These projects span various sectors, including electricity transmission and distribution networks, social infrastructure, and transportation facilities. BAM Mutual's implementation of these services aims to aid the region's energy transition.

"BAM Mutual's mission is to make infrastructure more affordable, and we are looking forward to doing that for project sponsors and the users of projects across Australia and New Zealand," said Seán W. McCarthy, CEO of BAM Mutual.

He further elaborated, "BAM's guaranty improves the economics for infrastructure investment by lowering the cost of borrowing, expanding the investor base and creating greater market liquidity, and giving buyers more certainty that they will be repaid on a timely basis, without exception." The initiative marks BAM's first expansion outside the United States since its inception.

The operations in Australia will be led by Andrew Bevan. Bevan brings 25 years of capital markets experience, having financed over AUD $10 billion worth of essential infrastructure. His portfolio includes notable projects such as the Melbourne Convention Centre and Brisbane Airport. Bevan will identify opportunities for BAM to provide bond insurance for projects like electric power facilities, airports, toll roads, and social infrastructure public-private partnerships (PPPs).

Discussing the regional infrastructure needs, Bevan emphasised, "The region's infrastructure needs more than AUD $200 billion of investment over the next five years to support sustainable development and a strong economy." He added, "BAM Mutual's guaranty has a strong track record of helping attract investors to finance essential projects, improving market access and lowering costs. I'm proud to be bringing these tools to Australia and New Zealand."

The new Melbourne office will be supported by an experienced team, composed of professionals with extensive backgrounds in infrastructure finance. This includes senior executives in the United States with specific experience in Australian markets.

BAM Mutual, since its launch in 2012, has insured over USD $150 billion of long-term securities for more than 6,000 bond issuers. The company's bond insurance model is designed to stabilise the market by eliminating risks and conflicts of interest that previously plagued the financial-guaranty insurance industry. A portion of the premiums paid by issuers of BAM-insured bonds directly supports BAM's capital base, enhancing its long-term stability and financial strength.

Rated AA with a Stable outlook by S&P Global Ratings, BAM has maintained its high rating since 2012. The company's claims-paying resources have consistently grown over the past decade and now total more than USD $1.5 billion. This underpins the confidence in the insurer's ability to support infrastructure projects through robust financial backing.

BAM Mutual's expansion reflects the pressing need for significant investment in infrastructure to sustain and grow the region's economy. Covering sectors such as energy, social infrastructure, and transportation, BAM's insurance services aim to provide enhanced market access, reduce borrowing costs, and deliver essential infrastructure on time.