Essent bolsters capacity through $424m deal
Bermudian-based mortgage insurer Essent Group Ltd has obtained $424.4 million of coverage from Radnor Re, a special purpose insurer also domiciled on the island.
Radnor Re is backed by insurance-linked notes with ten-year maturities.
The senior notes have been listed on the Bermuda Stock Exchange and were sold to eligible third-party capital markets investors in an unregistered private offering.
Morningstar Credit Ratings has given the notes a BBB rating.
The notes will provide fully collateralised excess of loss reinsurance coverage on mortgage insurance policies written by Essent in 2017 to the group’s subsidiary Essent Guaranty.
In a statement, the company said Radnor Re was not a subsidiary or an affiliate of Essent Group.
“We are very excited to announce the closing of our inaugural credit risk transfer transaction,” Mark Casale, Essent’s chairman and chief executive officer, said.
“This transaction is a significant milestone for our company, as it expands our capital sources while also providing a layer of protection against adverse credit losses.
“Additionally, we believe that a transaction like this strengthens our mortgage insurance franchise and enhances the role that Essent plays in supporting a strong and robust US housing finance system.”