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Radian secures $562m of reinsurance from capital markets

12th April 2019 - Author: Charlie Wood

Radian Guaranty, a subsidiary of Radian Group, has secured $562 million of credit risk protection from Bermudian special purpose insurer Eagle Re 2018-1 Ltd. through the issuance of mortgage insurance-linked notes (ILNs) to eligible third-party capital markets investors in an unregistered private offering.

Radian Group logoThe four classes of ILNs issued by Eagle Re to fund its reinsurance obligations have a 10-year maturity with a 7-year call option. The ILNs are non-recourse to  Radian Group or its subsidiaries and affiliates.

“We were once again pleased with the strong market demand for our ILN transaction,” said Radian’s Chief Executive Officer Rick Thornberry.

“The successful execution of Eagle Re 2019-1 is indicative of both the quality of the mortgage insurance we have written and the increasing breadth and depth of investors interested in this asset class.”

The ILNs issued by Eagle Re consist of four classes.

RMS

$107,054,000 Class M-1A Notes with a coupon equal to one-month LIBOR plus 125 basis points.

$176,640,000 Class M-1B Notes with a coupon equal to one-month LIBOR plus 180 basis points.

$235,520,000 Class M-2 Notes with a coupon equal to one-month LIBOR plus 330 basis points.

$42,822,000 Class B-1 Notes with a coupon equal to one-month LIBOR plus 450 basis points.

The Notes have been assigned ratings of BBB+ for Class M-1A; BBB- for Class M-1B; BB- for Class M-2; and B+ for Class B-1 by Morningstar Credit Ratings LLC.

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