The re/insurer reported cat loss of $203.3m, including $11.9m related to COVID-19.
The insurer sees 'significant opportunities' within the contingency insurance area to strengthen its market position.
Enstar has made a second bid of $34.50 per share, topping Arch Capital's $622m all-cash offer.
Enstar has revised its offer to $34.50 per share and threatened legal action over the Arch deal.
The re/insurer has added $10 million to $15 million to its COVID-19 loss estimate as claims rise.
Watford believes it will be better positioned as a standalone business within Arch.
Arch MI says investors are showing strong interest as the impact of COVID-19 becomes clearer.
The deal marks the first mortgage indemnity insurance-linked note transaction since the onset of COVID-19.
The offering is being led by Wells Fargo, with BofA, Credit Suisse, JP Morgan and Lloyds as joint book-running managers.
The Bermuda-based re/insurer reported nearly $87 million losses related to the COVID-19 pandemic.