On April 7, 2022, Arch Capital Group Ltd. entered into a Second Amendment to the Third Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent and the lenders party thereto. The Amendment amends the existing Third Amended and Restated Credit Agreement of the Borrower, dated as of December 17, 2019, and as amended on August 12, 2020 and September 29, 2021. The Credit Agreement provides for a $425 million secured facility for letters of credit, the size of which was increased by $175 million, from $250 million, by the Amendment.

The Credit Agreement also provides for a $500 million unsecured facility for revolving loans and letters of credit. Obligations of each Designated Subsidiary Borrower under the Tranche A Facility are secured by cash and eligible securities of such Designated Subsidiary Borrower held in collateral accounts. Subject to the receipt of commitments, the Senior Credit Facility may be increased up to an aggregate of $1.25 billion.

Arch Capital Group (U.S.) Inc. guarantees the obligations of ACGL, ACGL guarantees the obligations of ACUS and Arch U.S. MI Holdings Inc., and Arch Capital Finance LLC guarantees the obligations of ACGL and ACUS. The commitments under the Credit Agreement will expire on December 17, 2024, and all loans then outstanding under the Credit Agreement must be repaid at that time. Letters of credit issued under the Credit Agreement will not have an expiration date later than December 17, 2025.

The Amendment also establishes Term SOFR as the new interest rate benchmark for amounts that previously bore interest by reference to LIBOR under the Existing Credit Agreement. The Credit Agreement contains customary representations and warranties, conditions to credit extensions, affirmative and negative covenants, and events of default. Each Designated Subsidiary Borrower (other than ACUS and any borrower whose principal business is mortgage insurance) is required to maintain a financial strength rating of at least “B++” by A.M. Best Company Inc. or “BBB+” from Standard & Poor's Financial Services LLC.

In addition, ACGL is required to comply with a maximum consolidated leverage ratio covenant, and each of ACGL, Arch Reinsurance Company and Arch Reinsurance Ltd. is required to comply with a minimum consolidated tangible net worth covenant.