Essent increases credit facility
Essent Group Ltd has increased its credit facility from $500 million to $625 million.
The Bermudian-based mortgage re/insurer said the amendment comprised an increase in its revolving credit facility from $275 million to $300 million, as well as the issuance of an additional $100 million non-amortising term loan.
The revolving credit facility and term loans will mature concurrently in October 2023. Essent will also have an option to increase the credit facility to $775 million.
The borrowings would be available for working capital and general corporate purposes, including capital contributions to Essent’s insurance and reinsurance subsidiaries, the company said.
Essent said the proceeds of the additional term loan issued, as well as cash at its holding company, were used at closing to pay down all amounts drawn under the revolving credit facility.
Mark Casale, Essent’s chairman and chief executive officer, said: “We are very pleased with the amended terms of the facility, which we believe are reflective of Essent’s strong financial profile.
“The increase of the commitment under the credit facility, and the extension of the maturity to October 2023, further enhances our already strong capital and liquidity position and adds to our financial flexibility.”
Borrowings under the revolving credit facility and term loan will accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the company’s option, plus an applicable margin.
On the closing date, the minimum interest rate for any borrowings was one-month Libor plus 2 per cent.
JPMorgan Chase Bank, NA, BofA Securities, Inc, and RBC Capital Markets acted as joint lead arrangers and joint bookrunners for the Credit Facility. Associated Bank, NA, Citizens Bank, NA, KeyBanc Capital Markets Inc., and US Bank National Association also acted as joint lead arrangers.