Genworth back for second mortgage ILS, $350m Triangle Re 2020-1

Share

Genworth Mortgage Insurance, the mortgage insurer subsidiary of Genworth Financial, is back in the capital markets for its second mortgage insurance-linked securities (ILS) issuance, with a $350 million Triangle Re 2020-1 Ltd. deal.

genworth-logoGenworth first tapped the capital markets for mortgage reinsurance capacity in November 2019, successfully sponsoring its first mortgage ILS with a $302.8 million Triangle Re 2019-1 Ltd. transaction.

Now, the company is seeking an expanded source of capital markets backed excess of loss mortgage reinsurance with this larger second arrangement.

Mortgage insurance-linked notes (ILN’s) have become an integral part of leading mortgage insurers’ capital stacks, providing efficient reinsurance capacity from capital market investors that helps to back their growing portfolios of mortgage insurance risk.

Similar in structure to a catastrophe bond, but effectively covering mortgage credit as their main risk, the mortgage ILS market is growing steadily and by opening the capital markets these insurers are benefiting from similar capital efficiencies to P&C carriers sponsoring cat bonds for reinsurance.

Genworth has registered a new Bermuda special purpose insurer (SPI) named Triangle Re 2020-1 Ltd. for its second mortgage ILS deal.

Triangle Re 2020-1 Ltd. will issue mortgage insurance-linked notes (ILNs), each of which have 10-year legal final maturities and each being designed to cover 67% of a layer of risk in Genworth’s reinsurance tower.

The roughly $350 million of notes will be sold to capital market investors and the proceeds used to collateralize underlying excess of loss reinsurance agreements between Triangle Re 2020-1 and sponsor Genworth.

The Triangle Re 2020-1 Ltd. mortgage ILS deal will feature the following tranches of notes, along with their pre-sale sizes and preliminary ratings from Moody’s.

  • $134.854 million Class M-1A notes, rated Baa3 (sf)
  • $54.94 million Class M-1B notes, rated Ba2 (sf)
  • $59.935 million Class M-1C notes, rated Ba2 (sf)
  • $74.919 million Class M-2 notes, rated B1 (sf)
  • $24.973 million Class B-1 notes, rated B2 (sf)

The subject mortgages have an insurance coverage effective date on or after January 1st 2020, through August 31st 2020 and the reference pool of insured mortgage loans consists of 221,151 loans, with a total insured loan balance of approximately $60 billion.

It’s good to see the continued use of the capital markets as a source of mortgage reinsurance protection and the continued activity in this market, even after COVID-19, demonstrates the appetite of investors for this risk.

Details of every mortgage insurance-linked notes issuance can be found here in our 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.

Read previous post:
Kathleen Reardon appointed CEO of Hiscox Re & ILS

Hiscox Re & ILS, the global reinsurance and insurance-linked securities (ILS) division of the Hiscox Group, has announced the hiring...

Close