Genworth Mortgage Insurance Completes Mortgage Insurance-Linked Note Transaction

Rhea-AI Summary

Genworth Mortgage Insurance, a segment of Genworth Financial (NYSE: GNW), has secured $349.6 million in excess of loss reinsurance coverage from Triangle Re 2020-1 Ltd. This is for a portfolio of mortgage insurance policies issued between January and August 2020. Triangle Re issued five classes of mortgage insurance-linked notes (ILNs) to fund this coverage, which is independent of Genworth's subsidiaries. This transaction, the second ILN issuance by Genworth MI, continues their robust credit risk transfer program, which has yielded over $2.4 billion in reinsurance coverage in five years.

Positive

• Secured $349.6 million in reinsurance coverage, enhancing capital management.
• Continues strong credit risk transfer program with over $2.4 billion generated in five years.

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• None.

RICHMOND, Va., Oct. 22, 2020 /PRNewswire/ -- Genworth Mortgage Insurance ("Genworth MI"), an operating segment of Genworth Financial, Inc. (NYSE: GNW), today announced that its flagship legal entity, Genworth Mortgage Insurance Corporation, has obtained $349.6 million of fully collateralized excess of loss reinsurance coverage from Triangle Re 2020-1 Ltd. ("Triangle Re") on a portfolio of existing mortgage insurance policies written from January 2020 through August 2020. Triangle Re is a special purpose insurer domiciled in Bermuda and is not a subsidiary or affiliate of Genworth Financial, Inc.

Triangle Re funded its reinsurance obligations by issuing five classes of mortgage insurance-linked notes (ILNs), which have a 10-year legal final maturity with a 7-year call option, to qualified institutional investors in an unregistered private offering. The ILNs are non-recourse to Genworth Financial, Inc. or its subsidiaries and affiliates.

The ILNs consist of the following five classes:

• $ 134,854,000 Class M-1A Notes with a coupon equal to one-month LIBOR plus 300 basis points
• $ 54,940,000 Class M-1B Notes with a coupon equal to one-month LIBOR plus 390 basis points
• $ 59,935,000 Class M-1C Notes with a coupon equal to one-month LIBOR plus 450 basis points
• $ 74,919,000 Class M-2 Notes with a coupon equal to one-month LIBOR plus 560 basis points
• $ 24,973,000 Class B-1 Notes with a coupon equal to one-month LIBOR plus 775 basis points

This transaction marks the second ILN issuance for Genworth MI, representing its third credit risk transfer transaction since the COVID-19 pandemic began, and is a continuation of the company's robust credit risk transfer program, which has generated more than $2.4 billion of excess of loss reinsurance coverage over the past five years.

"I'm proud of the work we continue to do to strengthen our portfolio and balance sheet," said Genworth MI's Chief Executive Officer Rohit Gupta. "In the best of times, these actions help us effectively manage our capital—and in uncertain times, they help us weather the impact of market volatility on our portfolio and protect our balance sheet."

The securities described herein have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the aforementioned securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which, or to any person to whom, such an offer, solicitation or sale would be unlawful.

About Genworth Mortgage Insurance

Genworth Mortgage Insurance, an operating segment of Genworth Financial, Inc. (NYSE: GNW), is headquartered in Raleigh, North Carolina, and operates in all 50 states and the District of Columbia. Genworth Mortgage Insurance works with lenders and other partners to help people responsibly achieve and maintain the dream of homeownership by ensuring the broad availability of affordable low down payment mortgage loans. Genworth has been providing mortgage insurance products and services in the U.S. since 1981.

 

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SOURCE Genworth Mortgage Insurance

FAQ

What is the reinsurance coverage amount obtained by Genworth (GNW)?

Genworth Mortgage Insurance obtained $349.6 million in fully collateralized excess of loss reinsurance coverage.

When was Genworth's recent reinsurance coverage announced?

The reinsurance coverage was announced on October 22, 2020.

What is the purpose of the mortgage insurance-linked notes issued by Triangle Re?

The notes were issued to fund the reinsurance obligations for Genworth's mortgage insurance policies.

How much has Genworth generated through its credit risk transfer program?

Genworth has generated over $2.4 billion in excess of loss reinsurance coverage in the past five years.

What does the recent transaction signify for Genworth's financial strategy?

The transaction indicates Genworth's ongoing efforts to strengthen its portfolio and manage capital effectively.