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Debt and Financing Arrangements | 12 Months Ended
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Dec. 31, 2024
Debt Disclosure [Abstract] |
Debt and Financing Arrangements | The Company’s senior notes payable at December 31, 2024 and 2023 were as follows:
|  |  |  |  |  | Carrying Amount at
|  | Interest |  | Principal |  | December 31,
|  | (Fixed) |  | Amount |  | 2024 |  | 2023
2034 notes (1) |  | 7.350 | % |  | $ | 300 |  |  | $ | 298 |  |  | $ | 298 |
2043 notes (2) |  | 5.144 | % |  | 500 |  |  | 496 |  |  | 495 |
2026 notes (3) |  | 4.011 | % |  | 500 |  |  | 499 |  |  | 498 |
2046 notes (4) |  | 5.031 | % |  | 450 |  |  | 446 |  |  | 446 |
2050 notes (5) |  | 3.635 | % |  | 1,000 |  |  | 989 |  |  | 989 |
|  |  |  | $ | 2,750 |  |  | $ | 2,728 |  |  | $ | 2,726 |
(1) Senior notes of Arch Capital issued on May 4, 2004 and due May 1, 2034 (“2034 notes”). (2) Senior notes of Arch-U.S., a wholly-owned subsidiary of Arch Capital, issued on December 13, 2013 and due November 1, 2043 (“2043 notes”), fully and unconditionally guaranteed by Arch Capital. (3) Senior notes of Arch Capital Finance LLC (“Arch Finance”), a wholly-owned finance subsidiary of Arch Capital, issued on December 8, 2016 and due December 15, 2026 (“2026 notes”), fully and unconditionally guaranteed by Arch Capital. (4) Senior notes of Arch Finance issued on December 8, 2016 and due December 15, 2046 (“2046 notes”), fully and unconditionally guaranteed by Arch Capital (5) Senior notes of Arch Capital issued on June 30, 2020 and due June 30, 2050 (“2050 notes”). The 2034 notes are Arch Capital’s senior unsecured obligations and rank equally with all of its existing and future senior unsecured indebtedness. Interest payments on the 2034 notes are due on May 1st and November 1st of each year. Arch Capital may redeem the 2034 notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The 2043 notes are unsecured and unsubordinated obligations of Arch-U.S. and Arch Capital, respectively, and rank equally and ratably with the other unsecured and unsubordinated indebtedness of Arch-U.S. and Arch Capital, respectively. Interest payments on the 2043 notes are due on May 1st and November 1st of each year. Arch-U.S. may redeem the 2043 notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The 2026 notes are unsecured and unsubordinated obligations of Arch Finance and Arch Capital, respectively, and rank equally and ratably with the other unsecured and unsubordinated indebtedness of Arch Finance and Arch Capital, respectively. Interest payments on the 2026 notes are due on June 15th and December 15th of each year. Arch Finance may redeem the 2026 notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The 2046 notes are unsecured and unsubordinated obligations of Arch Finance and Arch Capital, respectively, and rank equally and ratably with the other unsecured and unsubordinated indebtedness of Arch Finance and Arch Capital, respectively. Interest payments on the 2046 notes are due on June 15th and December 15th of each year. Arch Finance may redeem the 2046 notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The 2050 notes are Arch Capital’s senior unsecured obligations and rank equally with all of its existing and future senior unsecured indebtedness. Interest payments on the 2050 notes are due on June 30 and December 30 of each year. Arch Capital may redeem the 2050 notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. Letter of Credit and Revolving Credit Facilities In the normal course of its operations, the Company enters into agreements with financial institutions that provide access to secured and unsecured credit facilities. Group Credit Facility Arch Capital and certain of its subsidiaries have access to a credit facility with a syndicate of financial institutions (the “Group Credit Facility”) that expires on August 23, 2028. The Group Credit Facility consists of a $425 million secured facility for letters of credit (the “Secured Facility”) and a $500 million unsecured facility for revolving loans and letters of credit (the “Unsecured Facility”). At December 31, 2024, the Secured Facility had $275 million of letters of credit outstanding and remaining capacity of $150 million, and the Unsecured Facility had no outstanding revolving loans or letters of credit, with remaining capacity of $500 million. The Group Credit Facility contains certain restrictive and maintenance covenants customary for facilities of this type, including restrictions on indebtedness, minimum consolidated tangible net worth, maximum leverage levels and minimum financial strength ratings. Arch Capital and its subsidiaries which are party to the agreement were in compliance with all covenants contained therein at December 31, 2024. Obligations of each borrower for letters of credit under the Secured Facility are secured by cash and eligible securities of such borrower and held in collateral accounts. Commitments under the Group Credit Facility may be increased up to, but not exceeding, an aggregate of $1.5 billion. Arch Capital has a one-time option to convert any or all outstanding revolving loans of Arch Capital and/or Arch-U.S. to term loans with the same terms as the revolving loans except that any prepayments may not be re-borrowed. Borrowings of revolving loans may be made at a variable rate based on Secured Overnight Financing Rate (“SOFR”). Secured letters of credit are available for issuance on behalf of certain Arch Capital subsidiaries. Arch Capital guarantees the obligations of Arch-U.S. and Arch U.S. MI Holdings Inc., Arch-U.S. guarantees the obligations of Arch Capital, and Arch Capital Finance LLC guarantees the obligations of Arch Capital and Arch-U.S. Other Credit Facilities Arch Re Bermuda, a wholly-owned subsidiary of Arch Capital, has access to a $175 million unsecured letter of credit facility with Lloyds Bank Corporate Markets plc., which expires on September 27, 2025. At December 31, 2024, this credit facility had $106 million of letters of credit outstanding and remaining capacity of $69 million. Arch Re Bermuda also has access to a letter of credit facility with Lloyds Bank Corporate Markets plc., which expires on December 31, 2027. Such credit facility provides for a $700 million facility for letters of credit in respect of Tier 2 Funds at Lloyds. As of December 31, 2024, $700 million face amount of letters of credit had been issued under this facility. In addition, Arch Re Bermuda had outstanding secured letters of credit through other facilities in the amount of $55 million, which were issued in the normal course of business (“LOC Facilities”). The principal purpose of the LOC Facilities is to issue, as required, evergreen standby letters of credit in favor of primary insurance or reinsurance counterparties with which certain of Arch Capital’s subsidiaries has entered into reinsurance arrangements. When issued, all secured letters of credit are secured by a portion of the investment portfolio. At December 31, 2024, these letters of credit were secured by investments with a fair value of $400 million. The Company had no outstanding revolving credit agreement borrowings at December 31, 2024 and 2023. Federal Home Loan Bank Membership Certain subsidiaries of the Company are members of Federal Home Loan Banks (“FHLBs”). Members may borrow from the FHLBs at competitive rates subject to certain conditions. Conditions include maintaining sufficient collateral deposits for funding and a requirement to hold stock in the FHLBs related to both membership and outstanding advances. At December 31, 2024 and 2023, the Company had no advances outstanding under the FHLB program.

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