Radian Guaranty, a subsidiary of US mortgage insurer Radian Group, has obtained $498 million of fully collateralized excess of loss reinsurance coverage from Eagle Re 2021-1 Ltd.
The excess of loss reinsurance covers eligible mortgage insurance policies written by Radian Guaranty in August 2020 through December 2020.
Eagle Re is a newly formed Bermuda special purpose insurer and is not a subsidiary or affiliate of Radian Guaranty.
Eagle Re has funded its reinsurance obligations by issuing six classes of mortgage insurance-linked notes (ILNs) with a 12.5-year maturity and 7-year call option to eligible third-party capital markets investors in an unregistered private offering.
The ILNs issued by Eagle Re consist of $82,956,000 Class M-1A Notes with a coupon equal to one-month SOFR plus 170 basis points, $82,956,000 Class M-1B Notes with a coupon plus 215 basis points, and $165,912,000 Class M-1C Notes with a coupon plus 270 basis points.
They also include $110,607,000 Class M-2 Notes with a coupon equal to one-month SOFR plus 445 basis points $27,652,000 Class B-1 Notes with a coupon plus 575 basis points, and $27,652,000 Class B-2 Notes with a coupon plus 625 basis points
Radian Group purchased $17.7 million of the B-1 tranche and the entire B-2 tranche.
