Arch Capital has conducted a public offering of 18 million depositary shares at $US25 ($32.50) each to fund two major acquisitions, one of which will make it the largest private mortgage insurer in the world.

The Bermuda-based insurer announced last month it is buying the United Guaranty Corporation (UGC) and AIG United Guaranty Insurance (Asia) from AIG.

Arch says its mortgage insurance business combined with UGC’s will be a world leader.

Chairman and CEO Constantine Iordanou says its mortgage insurance segment “expands and complements” its strengths in the specialty insurance and reinsurance businesses.

“We are excited about the combination of Arch and United Guaranty because these companies have led the market in innovation through their risk-based pricing models and focus on data analytics,” he said.

The $US450 million ($584.94 million) capital raising, which was due to close last Thursday, will also be used to pay related costs and expenses and for general corporate purposes.

After the acquisition announcement ratings agencies AM Best, Fitch and Moody’s placed Arch Capital Group under review with a view to a downgrade.