Essent Group Ltd. has announced that its subsidiary, Essent Guaranty, Inc., has secured $473.2 million of fully collateralised excess of loss reinsurance coverage from the capital markets.
The coverage was obtained through Radnor Re 2019-1 Ltd, a newly formed Bermuda special purpose insurer, and relates to mortgage insurance policies written by Essent in 2018.
Radnor Re 2019-1 funded its reinsurance obligations through the issuance of four classes of mortgage insurance-linked notes, with 10-year legal maturities, to third-party capital markets investors in an unregistered private offering.
The four classes of mortgage insurance-linked notes consist of $84,547,000 Class M-1A Notes with an initial interest rate of one-month LIBOR plus 125 basis points; $174,563,000 Class M-1B Notes with plus 195 basis points; $192,937,000 Class M-2 Notes at plus 320 basis points; and $21,137,000 Class B-1 Notes at plus 445 basis points.
Essent said that the senior M-1A class notes received a rating of A- from Morningstar Credit Ratings, LLC.
The insurer 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.
