Essent closes $473.2m mortgage ILS deal through Radnor Re

Essent Guaranty, a private mortgage insurer and subsidiary Bermuda-based Essent Group, has obtained $473.2 million of fully collateralised excess of loss reinsurance coverage on mortgage insurance policies written by Essent in 2018 from Radnor Re 2019-1.

Radnor Re 2019-1, a newly formed Bermuda special purpose insurer, has funded its reinsurance obligations through the issuance of four classes of mortgage insurance-linked notes - with 10-year legal maturities - to eligible third party capital markets investors in an unregistered private offering.

Credit ratings agency Morningstar has given the senior M-1A class notes a rating of A-.

The mortgage insurance linked-notes issued consist of four classes, including $84,547,000 Class M-1A Notes with an initial interest rate of one-month LIBOR (London Inter-bank Offered Rate) plus 125 basis points; $174,563,000 Class M-1B Notes with an initial interest rate of one-month LIBOR plus 195 basis points; $192,937,000 Class M-2 Notes with an initial interest rate of one-month LIBOR plus 320 basis points; and $21,137,000 Class B-1 Notes with an initial interest rate of one-month LIBOR plus 445 basis points.