Radian strikes $390m mortgage ILN deal

Mortgage insurer Radian Guaranty, a wholly owned subsidiary of the Radian Group, has obtained $390 million of fully collateralised excess of loss reinsurance coverage from Eagle Re 2020-2, a Bermuda-based special purpose insurer.

The excess of loss reinsurance covers eligible mortgage insurance policies written by Radian Guaranty in October 2019 through July 2020, excluding single premium payment policies.

Eagle Re funded its reinsurance obligations by issuing five classes of mortgage insurance-linked notes (ILNs) with a 10-year maturity and seven-year call option.

The ILNs are non-recourse to Radian Group and its subsidiaries and affiliates. They comprise $130,108,000 class M-1A notes with a coupon equal to one-month Libor plus 300 basis points; $65,054,000 class M-1B notes with a coupon equal to one-month Libor plus 400 basis points; $65,054,000 class M-1C notes with a coupon equal to one-month Libor plus 450 basis points; $97,581,000 class M-2 notes with a coupon equal to one-month Libor plus 560 basis points; and $32,527,000 class B-1 notes with a coupon equal to one-month Libor plus 700 basis points.

The ILNs were sold to eligible third-party capital markets investors in an unregistered private offering.

Earlier in February, Eagle Re funded $488 million of fully collateralised excess of loss reinsurance coverage for Radian Guaranty.