Essent Guaranty closes $363.4m mortgage reinsurance transaction

Essent Group’s wholly-owned subsidiary, Essent Guaranty, has obtained $363.4 million of fully collateralized excess of loss reinsurance coverage on mortgage insurance policies written in July 2023 through to July 2024 from Radnor Re 2024-1 Ltd., a newly formed Bermuda special purpose insurer.

Radnor Re 2024-1 Ltd. reportedly funded its reinsurance obligations through the issuance of five classes of mortgage insurance-linked notes, with 10-year legal maturities, to eligible third-party capital markets investors in an unregistered private offering.

The mortgage insurance-linked notes issued by Radnor Re 2024-1 Ltd. consist of the following five classes: $106,872,000 Class M-1A Notes with an initial interest rate of SOFR Rate plus 200 basis points;

$85,498,000 Class M-1B Notes with an initial interest rate of SOFR Rate plus 290 basis points;

$64,124,000 Class M-1C Notes with an initial interest rate of SOFR Rate plus 350 basis points;

$85,498,000 Class M-2 Notes with an initial interest rate of SOFR Rate plus 400 basis points;

$21,374,000 Class B-1 Notes with an initial interest rate of SOFR Rate plus 515 basis points.

This will be the tenth issuance of mortgage insurance-linked notes sponsored by Essent Guaranty and is the first since August 2023. The total is comprised of 43 tranches of notes, with a combined value of more than $4 billion.

After Bermuda-based Arch Capital Group, Essent Guaranty is the second most prolific sponsor of mortgage ILS notes.

Read more about this Radnor Re 2024-1 Ltd. transaction, and all others in the Deal Directory of our sister publication, Artemis.

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