Essent Group Ltd. Announces Closing of $363.4 Million Reinsurance Transaction and Related Mortgage Insurance-Linked Notes
Essent Group (NYSE: ESNT) has announced that its subsidiary, Essent Guaranty, Inc., has secured $363.4 million in fully collateralized excess of loss reinsurance coverage. This coverage applies to mortgage insurance policies written from July 2023 through July 2024. The reinsurance is provided by Radnor Re 2024-1 , a newly formed Bermuda special purpose insurer not affiliated with Essent Group
Radnor Re 2024-1 has funded its reinsurance obligations by issuing five classes of mortgage insurance-linked notes to eligible third-party capital markets investors in an unregistered private offering. These notes have 10-year legal maturities and varying interest rates based on the SOFR Rate plus additional basis points, ranging from 200 to 515 basis points depending on the class.
Essent Group (NYSE: ESNT) ha annunciato che la sua sussidiaria, Essent Guaranty, Inc., ha ottenuto 363,4 milioni di dollari in copertura di riassicurazione fully collateralized excess of loss. Questa copertura si applica alle polizze di assicurazione mutui emesse da luglio 2023 a luglio 2024. La riassicurazione è fornita da Radnor Re 2024-1, un nuovo assicuratore speciale con sede alle Bermuda non affiliato con Essent Group.
Radnor Re 2024-1 ha finanziato i suoi obblighi di riassicurazione emettendo cinque classi di note collegate all'assicurazione mutua a investitori qualificati dei mercati di capitali in un'offerta privata non registrata. Queste note hanno maturità legali di 10 anni e tassi di interesse variabili basati sul tasso SOFR più punti base aggiuntivi, che vanno da 200 a 515 punti base a seconda della classe.
Essent Group (NYSE: ESNT) ha anunciado que su filial, Essent Guaranty, Inc., ha asegurado 363,4 millones de dólares en cobertura de reaseguro fully collateralized excess of loss. Esta cobertura se aplica a las pólizas de seguro hipotecario emitidas desde julio de 2023 hasta julio de 2024. El reaseguro es proporcionado por Radnor Re 2024-1, un nuevo asegurador de propósito especial formado en Bermudas y no afiliado a Essent Group.
Radnor Re 2024-1 ha financiado sus obligaciones de reaseguro emitiendo cinco clases de notas vinculadas a seguros hipotecarios a inversores elegibles del mercado de capitales en una oferta privada no registrada. Estas notas tienen vencimientos legales de 10 años y tasas de interés variables basadas en la tasa SOFR más puntos base adicionales, que oscilan entre 200 y 515 puntos base dependiendo de la clase.
Essent Group (NYSE: ESNT)는 자회사인 Essent Guaranty, Inc.가 3억 6,340만 달러의 전액 담보 초과 손실 재보험 보장을 확보했다고 발표했습니다. 이 보장은 2023년 7월부터 2024년 7월까지 작성된 주택 담보 대출 보험 정책에 적용됩니다. 재보험은 Essent Group과 관련이 없는 새로 설립된 버뮤다 특별 목적 보험사인 Radnor Re 2024-1에 의해 제공됩니다.
Radnor Re 2024-1은 등록되지 않은 사모 제공에서 자격이 있는 제3자 자본 시장 투자자에게 주택 담보 대출 보험 관련 노트 5개 클래스를 발행하여 재보험 의무를 자금을 조달했습니다. 이 노트는 10년 법적 만기를 가지며 각 클래스에 따라 SOFR 금리에 추가되는 베이시스 포인트에 따라 다양한 이자율이 적용되어 200에서 515 베이시스 포인트에 이릅니다.
Essent Group (NYSE: ESNT) a annoncé que sa filiale, Essent Guaranty, Inc., a sécurisé 363,4 millions de dollars de couverture de réassurance entièrement garantie contre les pertes. Cette couverture s'applique aux polices d'assurance hypothécaire souscrites entre juillet 2023 et juillet 2024. La réassurance est fournie par Radnor Re 2024-1, un nouvel assureur à but spécial basé aux Bermudes et non affilié à Essent Group.
Radnor Re 2024-1 a financé ses obligations de réassurance en émettant cinq classes de titres liés à l'assurance hypothécaire à des investisseurs qualifiés sur les marchés de capitaux lors d'une offre privée non enregistrée. Ces titres ont des échéances légales de 10 ans et des taux d'intérêt variables basés sur le taux SOFR plus des points de base supplémentaires, variant entre 200 et 515 points de base selon la classe.
Essent Group (NYSE: ESNT) hat angekündigt, dass ihre Tochtergesellschaft Essent Guaranty, Inc. 363,4 Millionen Dollar an vollständig besicherten excess of loss Rückversicherungsdeckungen gesichert hat. Diese Deckung gilt für Hypothekenversicherungen, die von Juli 2023 bis Juli 2024 ausgestellt werden. Die Rückversicherung wird von Radnor Re 2024-1 bereitgestellt, einem neu gegründeten britischen Spezialversicherer, der nicht mit Essent Group verbunden ist.
Radnor Re 2024-1 hat seine Rückversicherungsverpflichtungen durch die Emission von fünf Klassen hypothekenversicherungsgebundener Anleihen an berechtigte Investoren aus dem Kapitalmarkt in einem nicht registrierten privaten Angebot finanziert. Diese Anleihen haben 10-jährige rechtliche Fälligkeiten und unterschiedliche Zinssätze, die auf dem SOFR-Satz plus zusätzlichen Basispunkten basieren und je nach Klasse zwischen 200 und 515 Basispunkten liegen.
- Secured $363.4 million in reinsurance coverage for mortgage insurance policies
- Diversified risk through five classes of mortgage insurance-linked notes
- Obtained funding from third-party capital markets investors
- None.
Insights
This reinsurance transaction is a strategic move by Essent Group to manage risk and enhance its capital position. The
The structure of the deal, using a Bermuda special purpose insurer and issuing mortgage insurance-linked notes, is a sophisticated approach to accessing capital markets. This allows Essent to transfer risk while potentially lowering its cost of capital compared to traditional reinsurance.
The varying interest rates on the note classes, ranging from SOFR plus
For investors, this transaction offers exposure to the mortgage insurance market with potentially attractive yields, especially in the higher-risk tranches. However, the unregistered private offering nature limits accessibility and may impact liquidity.
Overall, this deal strengthens Essent's financial position and demonstrates its proactive risk management, which should be viewed positively by shareholders and industry observers.
This reinsurance transaction showcases Essent Group's sophisticated approach to risk management in the mortgage insurance sector. By securing
The use of a Bermuda special purpose insurer (Radnor Re 2024-1 ) is a common structure in insurance-linked securities (ILS) transactions. This setup allows for efficient risk transfer and can provide regulatory capital relief for Essent.
The 10-year legal maturity of the notes aligns well with the long-tail nature of mortgage insurance risks. This extended duration provides Essent with long-term protection and investors with a stable investment horizon.
The tiered structure of the notes, from Class M-1A to B-1, allows for risk tranching, appealing to different investor risk appetites. This structure typically results in more efficient pricing overall compared to a single-tranche approach.
For the mortgage insurance industry, this transaction demonstrates continued investor appetite for mortgage risk, which is a positive signal for the sector's ability to manage and distribute risk effectively.
Radnor Re 2024-1 Ltd. has funded its reinsurance obligations through the issuance of five classes of mortgage insurance-linked notes, with 10-year legal maturities, to eligible third-party capital markets investors in an unregistered private offering.
The mortgage insurance-linked notes issued by Radnor Re 2024-1 Ltd. consist of the following five classes:
-
$106,872,000 -
$85,498,000 -
$64,124,000 -
$85,498,000 -
$21,374,000
The securities described herein have not been and will not be registered under the
Forward-Looking Statements
This press release may include “forward-looking statements” which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," “should,” “expect,” "plan," "anticipate," "believe," “estimate,” “predict,” or "potential" or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers or the loss of a significant customer; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs; decline in the volume of low down payment mortgage originations; uncertainty of loss reserve estimates; decrease in the length of time our insurance policies are in force; deteriorating economic conditions; and other risks and factors described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 16, 2024, as subsequently updated through other reports we file with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
About the Company:
Essent Group Ltd. (NYSE: ESNT) is a
Source: Essent Group Ltd.
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Investor Relations
Philip Stefano
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ir@essentgroup.com
Source: Essent Group Ltd.
FAQ
What is the total value of the reinsurance transaction announced by Essent Group (ESNT)?
What period do the mortgage insurance policies covered by this reinsurance transaction for ESNT span?
How many classes of mortgage insurance-linked notes were issued by Radnor Re 2024-1 for ESNT's reinsurance transaction?
What is the legal maturity of the mortgage insurance-linked notes issued in relation to ESNT's reinsurance transaction?
