Genworth Mortgage Insurance (MI), part of Genworth Financial, Inc., has obtained £302.8 million of fully collateralised excess of loss reinsurance coverage from the capital markets.
Genworth Mortgage Insurance Corporation, a wholly owned subsidiary of Genworth MI, secured the coverage from Triangle Re 2019-1 Ltd.
Triangle Re is a special purpose insurer domiciled in Bermuda, and is not a subsidiary or affiliate of Genworth Financial.
The deal marks Genworth’s first mortgage insurance-linked note (ILN) transaction, and relates to a portfolio of existing mortgage insurance policies written from January 2019 through September 2019.
Triangle Re funded its reinsurance obligations by issuing three classes of mortgage ILNs, which have a 10-year legal final maturity with a 7-year call option, to qualified institutional investors in an unregistered private offering.
The ILNs consists of three classes, comprising: $134,574,000 Class M-1 Notes with a coupon equal to one-month LIBOR plus 190 basis points; $151,396,000 Class M-2 Notes with a coupon equal to one-month LIBOR plus 290 basis points; and $16,821,000 Class B-1 Notes with a coupon equal to one-month LIBOR plus 415 basis points.
“We are very pleased with the strong market response to our first ILN transaction,” said Genworth MI’s Chief Executive Officer Rohit Gupta.
“It’s an effective complement to our existing credit risk transfer program, which has now generated more than $1.6 billion of excess of loss reinsurance coverage over the course of the program’s first five years,” he explained.
“These types of capital market transactions provide both incremental diversification of capital sources and additional capacity at an attractive cost to Genworth.”
