Essent Guaranty secures excess of loss reinsurance via Radnor Re MILN issue

Essent Guaranty, the wholly-owned subsidiary of Essent Group, has obtained $557.9 million of fully collateralised excess of loss reinsurance coverage from Radnor Re 2021-1, the newly formed Bermuda special purpose insurer.

The reinsurance covers mortgage insurance policies written in August 2020 through March 2021.

Radnor Re 2021-1 has funded its reinsurance obligations through the issuance of five classes of mortgage insurance-linked notes MILN), with 12.5-year legal maturities, to eligible third party capital markets investors in an unregistered private offering.

The MILNs include $139,478,000 of class M-1A notes with an initial interest rate of SOFR rate plus 165 basis points; $132,504,000 of class M-1B notes with an initial interest rate of SOFR plus 170 basis points; $153,426,000 of class M-1C notes with an initial interest rate of SOFR plus 270 basis points; $97,634,000 of class M-2 notes with an initial interest rate of SOFR plus 315 basis points; and $34,869,000 of class B-1 notes with an initial interest rate of SOFR plus 400 basis points.

The notes will not be registered under the US Securities Act of 1933 and may not be offered or sold in the US, absent registration or an applicable exemption from registration requirements.

Radnor Re 2021-1 is not a subsidiary or an affiliate of Essent Group.