Enact gets strong demand for $248m Triangle Re 2023-1 mortgage ILS

Enact Mortgage Insurance has successfully closed on its new mortage insurance-linked securities (ILS) issuance, securing $248 million of collateralized mortgage reinsurance protection from the capital markets with the issuance of Triangle Re 2023-1 Ltd. mortgage insurance-linked notes.

Enact’s President and CEO Rohit Gupta said that demand was strong from investors and reinsurers for the notes, as this mortgage ILS market continues to see momentum build after a hiatus through the pandemic and volatile period of capital markets.

As we reported back at the start of the month, this is the sixth issuance of Triangle Re mortgage insurance-linked securities (ILS) for Enact Mortgage Insurance Corporation, which was formerly known as Genworth Mortgage Insurance.

Genworth had previously sponsored five issues of Triangle Re mortgage insurance-linked notes, as it looked to source collateralized mortgage reinsurance up to September 2021, after which it rebranded as Enact.

Since that time, like all of the other major US mortgage insurers, Enact stayed away from the mortgage ILS market, returning only now at a time when market conditions have improved and mortgage ILS issuance has been picking up.

The return has been successful and Enact has priced and close the deal on target.

This issuance provides Enact $248 million of fully collateralized excess of loss reinsurance, via the insurance-linked note issuance of Triangle Re 2023-1 Ltd., covering mortgage insurance risk from a portfolio of existing seasoned mortgage insurance policies written from July 1, 2022 through June 30, 2023.

The company explained that Triangle Re 2023-1 has funded the necessary reinsurance obligations through the issuance of four classes of mortgage insurance-linked notes, which have a 10-year legal maturity and a 5-year call option, to qualified institutional investors in an unregistered private offering.

The rounded final tranches along with their pricing can be seen below:

$106 million Class M-1A Notes with an initial interest rate of one-month SOFR plus 340 basis points
$69 million Class M-1B Notes with an initial interest rate of one-month SOFR plus 525 basis points
$55 million Class M-2 Notes with an initial interest rate of one-month SOFR plus 650 basis points
$18 million Class B-1 Notes with an initial interest rate of one-month SOFR plus 740 basis points

“This Triangle Re transaction marks the sixth ILN issuance for Enact and we’re very pleased with the placement which saw strong interest from investors and reinsurers,” explained Rohit Gupta, President and CEO of Enact. “This transaction builds on the success of our CRT program, demonstrates our ability to access the capital markets, and further enhances the flexibility and efficiency of our capital structure for the benefit of our customers and shareholders.”

As our updated chart now shows, mortgage insurance-linked securities (ILS) issuance is about $1.4 billion in 2023 so far and now running ahead of last year’s total.

You can read all about the Triangle Re 2023-1 Ltd. mortgage insurance-linked securities transaction and every other mortgage ILS deal in our specific directory of mortgage ILS deals, as well as in our all-encompassing Artemis Deal Directory.