Essent reopens mortgage ILS market with $238m Radnor Re 2022-1

Share

Mortgage insurer Essent Guaranty, a wholly owned subsidiary of Essent Group Ltd., has completed its latest insurance-linked securities (ILS) placement, securing $237.9 million of fully collateralised excess of loss reinsurance via Bermuda-based special purpose insurer (SPI), Radnor Re 2022-1 Ltd.

essent-guaranty-logoAs we wrote earlier in September, Essent Guaranty’s return to the mortgage ILS, or mortgage insurance-linked notes market followed a quiet period for the sector, and is the first deal issued since April.

The target had originally been higher, at roughly $304 million, but the end-result is that three of the four layers covered by tranches of notes were only 70% funded.

The mortgage focused insurer has obtained almost $238 million of reinsurance coverage on mortgage insurance policies written in October 2021 through July 2022 from Radnor Re 2022-1 Ltd.

The SPI funded its reinsurance obligations via the issuance of four tranches of mortgage ILS notes, each with 10-year legal maturities, to eligible third-party investors in the capital markets through an unregistered private offering.

The four tranches of notes issued by Radnor Re 2022-1 Ltd. consist of the following:

  • $84.1 million Class M-1A notes with an initial interest rate of SOFR Rate plus 375 basis points (100% funded)
  • $88.3 million Class M-1B Notes with an initial interest rate of SOFR Rate plus 675 basis points (70% funded)
  • $49.1 million Class M-2 Notes with an initial interest rate of SOFR Rate plus 850 basis points (70% funded)
  • $16.4 million Class B-1 Notes with an initial interest rate of SOFR Rate plus 1050 basis points (70% funded)

This latest issuance is the eighth from Essent under its Radnor Re program, taking the total volume of all transactions brought to market by the firm to approximately $3.4 billion.

2021 was a record year for the mortgage ILS space, with 14 transactions bringing a combined $6.3 billion of mortgage risk to market.

When compared with recent years, issuance of mortgage deals has been slow in 2022, with just three deals seen so far, amounting to $994 million of mortgage insurance risk.

Read all about this Radnor Re 2022-1 Ltd. mortgage insurance ILS transaction from Essent Guaranty in the Artemis Deal Directory.

———————————————————————
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

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.