Essent secures $363.4 million in reinsurance coverage

Essent secures $363.4 million in reinsurance coverage | Insurance Business New Zealand

Reinsurance

Essent secures $363.4 million in reinsurance coverage

It is set to provide fully collateralized coverage through mortgage insurance-linked notes

Reinsurance

By
Kenneth Araullo

Essent Group Ltd announced that its subsidiary, Essent Guaranty, Inc, has secured $363.4 million in fully collateralized excess of loss reinsurance coverage on mortgage insurance policies written between July 2023 and July 2024.

The coverage was obtained from Radnor Re 2024-1 Ltd, a Bermuda special purpose insurer that is not affiliated with Essent Group Ltd.

Radnor Re 2024-1 Ltd. has financed its reinsurance obligations through the issuance of five classes of mortgage insurance-linked notes with 10-year legal maturities. These notes were offered to eligible third-party capital markets investors in a private, unregistered offering.

The mortgage insurance-linked notes consist of $106.9 million in Class M-1A Notes with an initial interest rate of the SOFR Rate plus 200 basis points, $85.5 million in Class M-1B Notes with an initial interest rate of the SOFR Rate plus 290 basis points, $64.1 million in Class M-1C Notes with an initial interest rate of the SOFR Rate plus 350 basis points, $85.5 million in Class M-2 Notes with an initial interest rate of the SOFR Rate plus 400 basis points, and $21.4 million in Class B-1 Notes with an initial interest rate of the SOFR Rate plus 515 basis points.

These securities are not registered under the US Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption.

Earlier this month, Ledger Investing announced the successful launch and funding of a new casualty sidecar facility, which will provide up to $100 million in capital to support the casualty reinsurance business of a global reinsurer over three underwriting years. The capital will be deployed on a quota share basis.

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