One of the largest mortgage insurers in the United States, Mortgage Guaranty Insurance Corporation (MGIC), has sought $318.6 million of capital markets-backed reinsurance capacity with its first insurance-linked securities (ILS) transaction, according to our sister site Artemis.
Reports from Artemis had revealed that the mortgage insurance specialist was eyeing up the market back in July, as the success of transactions looked likely to encourage new sponsors like MGIC to come forward.
MGIC Investment Corporation, the parent of MGIC, underwrote roughly $500 million of premium in the first-half of 2018 and has around $200 billion of primary mortgage insurance in force.
Artemis understands that the Special Purpose Insurance (SPI) vehicle in question is Home Re 2018-1 Ltd., which was registered in Bermuda in September.
Further reports from Artemis stated that the rationale behind this deal is as much capital driven as reinsurance, with the Home Re 2018 transaction in question likely to offset the majority of the impacts due to changes in the Private Mortgage Insurer Eligibility Requirements (PMIERs).
MGIC said that its Home Re 2018-1 Ltd. mortgage insurance-linked note offering is expected to be completed by the end of October 2018.
According to Artemis’ data from its extensive catastrophe bond and related ILS Deal Directory, the mortgage insurance-linked note and ILS market has now reached an outstanding size of $2.8 billion, the largest it has ever been.
