Bermuda domiciled mortgage insurer Essent Group Ltd. has announced that its subsidiary, Essent Guaranty, Inc., has secured a further $333.8 million of fully collateralised excess of loss reinsurance coverage from the capital markets.
The coverage was obtained through Radnor Re 2019-2 Ltd, a newly formed Bermuda special purpose insurer, and relates to mortgage insurance policies written by Essent in 2015 and 2016.
The announcement follows an earlier deal in March 2019, when Essent secured $473.2 million of mortgage reinsurance via a similar capital markets transaction using the Radnor Re vehicle.
Essent explained that Radnor Re 2019-2 Ltd. funded its reinsurance obligations through the issuance of three classes of mortgage insurance-linked notes, with 10-year legal maturities, to eligible third party capital markets investors in an unregistered private offering.
The three classes of mortgage insurance-linked notes consists of $125,734,000 Class M-1A Notes with an initial interest rate of one-month LIBOR plus 120 basis points; $186,432,000 Class M-1B Notes with plus 175 basis points; and $21,678,000 Class B-1 Notes at plus 270 basis points.
Essent previously secured $424.4 million of collateralised reinsurance from the capital markets in March 2018 via a transaction with special purpose insurer Radnor Re 2018-1.
