Enact Holdings’ flagship legal entity, Enact Mortgage Insurance Corporation, has secured $248 million of fully collateralized excess of loss reinsurance coverage through the issuance of an insurance-linked note transaction with Triangle Re 2023-1 Ltd.
According to Enact, the transaction provides coverage on a portfolio of existing seasoned mortgage insurance policies written from July 1, 2022 through June 30, 2023.
The firm explained that Triangle Re 2023-1 funded its reinsurance obligations by issuing four classes of mortgage insurance-linked notes, which have a 10-year legal maturity and a 5-year call option to qualified institutional investors in an unregistered private offering.
The insurance-linked notes are non-recourse to Enact, or its subsidiaries and affiliates.
This is the sixth issuance of Triangle Re mortgage insurance-linked securities (ILS) for Enact Mortgage Insurance Corporation, formerly known as Genworth Mortgage Insurance.
Genworth had sponsored five Triangle Re mortgage insurance-linked notes issuances to source collateralized mortgage reinsurance up to September 2021, after which it rebranded as Enact. It has since stayed away from the mortgage ILS market, returning now at a time when issuance has been picking up.
(Follow this link to our sister publication, Artemis, to see a chart showing issuance of mortgage ILS deals by year, where you can observe the uptick more clearly.)
The transaction is split into the following tranches, along with their provisional ratings from DBRS Morningstar:
$105.7 million Class M-1A at BB (high) (sf)
$69.2 million Class M-1B at BB (low) (sf)
$54.7 million Class M-2 at B (high) (sf)
$18.2 million Class B-1 at B (sf)
Rohit Gupta, President and CEO of Enact, commented, “This Triangle Re transaction marks the sixth insurance-linked note issuance for Enact and we’re very pleased with the placement which saw strong interest from investors and reinsurers.
“This transaction builds on the success of our CRT program, demonstrates our ability to access the capital markets, and further enhances the flexibility and efficiency of our capital structure for the benefit of our customers and shareholders.”
Read more about this transaction, and all others, in the Artemis’ Deal Directory.
