Eagle Re raises $350m in insurance linked notes

Mortgage insurer Radian Guaranty has obtained more than $350 million of excess of loss reinsurance coverage from Bermuda-based special purpose insurer Eagle Re 2023-1.

Radian said the fully collateralised coverage covered eligible mortgage insurance guarantees written by the subsidiary of Radian Group between April and December 2022.

This is the seventh rated mortgage insurance-linked notes issuance under an Eagle Re vehicle for Radian.

Eagle Re funded its reinsurance obligations by issuing four classes of mortgage insurance-linked notes (ILNs) with a 10-year maturity and five-year call option to eligible third-party capital markets investors in an unregistered private offering. The ILNs are non-recourse to Radian Group and its subsidiaries and affiliates.

The ILNs issued by Eagle Re consist of the following four classes:

• $110,337,000 Class M-1A Notes with a coupon equal to one-month SOFR plus 200 basis points
• $145,644,000 Class M-1B Notes with a coupon equal to one-month SOFR plus 395 basis points
• $75,029,000 Class M-2 Notes with a coupon equal to one-month SOFR plus 520 basis points
• $22,067,000 Class B-1 Notes with a coupon equal to one-month SOFR plus 685 basis points

After closing, investors have the option to exchange their M-1B Notes for proportionate interests in Class M-1B-1 Notes, Class M-1B-2 Notes and Class M-1B-3 Notes (Exchangeable Notes), and the Exchangeable Notes may be exchanged for Class M-1B Notes with the same proportionate interest.

The Notes have been assigned ratings by DBRS, Inc. (DBRS Morningstar) of BBB (low) (sf) for Class M-1A; BB (sf) for Class M-1B; B (high) (sf) for Class M-2; and B (sf) for Class B-1 (sf).