Essent Group unveils $473.2m reinsurance transaction

Bermuda-based mortgage insurance provider Essent Group, a subsidiary of Essent Guaranty, has secured $473.2 million of fully collateralised excess of loss reinsurance coverage.

The coverage relates to mortgage insurance policies written by Essent in 2018 from Radnor Re 2019-1, a newly formed Bermuda special purpose insurer.

Radnor Re 2019-1 has funded its reinsurance obligations through the issuance of four classes of mortgage insurance-linked notes, with 10-year legal maturities, to third party capital markets investors in an unregistered private offering.

The mortgage insurance linked-notes issued consist of four classes, including $84,547,000 Class M-1A Notes with an initial interest rate of one-month LIBOR (London Inter-bank Offered Rate) plus 125 basis points; $174,563,000 Class M-1B Notes with an initial interest rate of one-month LIBOR plus 195 basis points; $192,937,000 Class M-2 Notes with an initial interest rate of one-month LIBOR plus 320 basis points; and $21,137,000 Class B-1 Notes with an initial interest rate of one-month LIBOR plus 445 basis points.

Earlier in March 2018, the company secured $424.4 million collateralised reinsurance from the capital markets.

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