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Bermuda-based Essent Group, which offers private mortgage insurance for single-family mortgage loans in the US, has amended its credit facility to increase the total facility from $200 million to $375 million.
The company announced an increase in the revolving credit facility from $200 million to $250 million and an extension of its maturity from April 2019 to May 2021.
Essent also revealed the issuance of a $125 million four-year, non-amortising term loan maturing in May 2021 (concurrently with the revolving credit facility), the proceeds of which were used at closing to pay down borrowings previously drawn under the revolving credit facility.
Finally, Essent introduced an option to increase the credit facility to $450 million during its term.
The company said that borrowings under the credit facility are available for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries.
“The credit facility further enhances our financial flexibility to support our ongoing growth,” said chairman and CEO Mark Casale. “We are very pleased with the amended terms of the facility, which we believe are reflective of Essent’s strong financial profile.”
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 1-Month LIBOR plus 2 percent. The obligations under the credit facility are secured by certain assets of Essent Group, excluding the stock and assets of its insurance and reinsurance subsidiaries. Additional details related to the terms and conditions of the credit facility are included in the credit agreement, which will be filed with the Securities Exchange Commission as an exhibit to a Current Report on Form 8-K.
Essent Group, Bermuda, US, Mortgage, North America