American International Group, Inc.'s, mortgage insurance business, United Guaranty Corporation (“UGC”), has obtained $298.6 million of indemnity reinsurance from Bellemeade Re II Ltd., a special purpose insurer, for a portfolio of mortgage insurance (“MI”) policies issued in 2008 and prior years.

Bellemeade is funding its reinsurance obligations through the issuance of three classes of amortizing notes with 10-year legal final maturities. This insurance-linked securities (“ILS”) transaction provides United Guaranty with fully collateralized coverage from Bellemeade for potential losses on a portion of its legacy MI portfolio, AIG said in a statement.

United Guaranty's president and chief executive officer, Donna DeMaio, said, “We believe this marks the first time a mortgage insurer has accessed the capital markets for a risk transfer involving a mortgage insurance portfolio made up of policies issued in 2008 and earlier years. The transaction not only helps United Guaranty manage risk, but also demonstrates that investors are willing to assign value to this type of portfolio from the 2008 and earlier period.”