Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Oaktown Re V Ltd.

The Artemis Catastrophe Bond and Insurance-linked Securities Deal Directory aims to provide a one-stop resource for information on every cat bond and ILS transaction we hold information on. The content of this Deal Directory is provided as is and there will be some omissions. Help us to keep these cat bond and ILS transaction summaries up to date by contacting us if you see an error or omission that you can correct.


Oaktown Re V Ltd. – At a glance:

  • Issuer: Oaktown Re V Ltd.
  • Cedent / sponsor: National Mortgage Insurance Corporation
  • Placement / structuring agent/s: Unknown
  • Risk modelling / calculation agents etc: Unknown
  • Risks / perils covered: Mortgage insurance risks
  • Size: $242m
  • Trigger type: Indemnity
  • Ratings: DBRS Morningstar rated (details below)
  • Date of issue: Oct 2020

Oaktown Re V Ltd. – Full details:

This is the fifth mortgage insurance-linked securities (ILS) transaction to be sponsored by NMI Holdings Inc., as it continues to source capital markets investor backed fully-collateralized mortgage reinsurance protection for its wholly owned subsidiary National Mortgage Insurance Corporation.

NMI has established Oaktown Re V Ltd. as a newly formed Bermuda special-purpose insurer established for the issuance of series of notes linked to the performance of its mortgage insurance book.

For this deal, Oaktown Re V is issuing four tranches of mortgage insurance-linked notes that are being sold to investors and the proceeds used to collateralize excess of loss mortgage reinsurance agreements between the issuer, Oaktown Re V and the beneficiary of the coverage National Mortgage Insurance Corporation.

In total, $242 million of 10-year mortgage insurance-linked notes are being issued by Oaktown Re V Ltd., with this transaction expected to close on October 29th 2020.

The transaction has now priced and breaks down in this way. Three of the tranches have received ratings from DBRS Morningstar:

  • $69,676,000 Class M-1A Notes with an initial interest rate of one-month LIBOR plus 2.40% – rated BBB (low) (sf)
  • $78,764,000 Class M-1B Notes with an initial interest rate of one-month LIBOR plus 3.60% – rated BB (low)(sf)
  • $78,764,000 Class M-2 Notes with an initial interest rate of one-month LIBOR plus 5.25% – rated B (low) (sf)
  • $15,147,000 Class B-1 Notes with an initial interest rate of one-month LIBOR plus 7.00%

Once the issuance is completed, National Mortgage Insurance Corporation will benefit from $242 million of fully collateralized excess of loss reinsurance protection from Oaktown Re V.

The reinsurance will cover an existing portfolio of mortgage insurance policies underwritten largely between April 2020 and September 2020.

The notes provide National MI with reinsurance against aggregate losses on subject loans beginning at a 2.00% cumulative claim rate threshold and providing coverage up to a 6.25% aggregate detachment level.

Importantly, National MI said that it expects to receive initial PMIERs credit for the portion of coverage attaching within the current risk-based required asset charge on subject loans, while additional benefit may be received if the PMIERs requirement on subject loans increases during the term.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

« Go back to the Catastrophe Bond Deal Directory

Help us keep this valuable resource up to date. If you have information on a catastrophe bond or insurance-linked security deal we have not covered or can see something that we should change, please contact us to let us know.