Essent obtains $280m mortgage reinsurance through ILS bond issuance

Mortgage re/insurer Essent Group has obtained more than $280 million of collateralised excess of loss reinsurance on its policies through newly formed special purpose Radnor Re.

Bermuda-based Essent said the mortgage insurance policies were written between August 2022 and June 2023 and are funded through the issuance of four classes of mortgage insurance-linked 10-year notes to third party investors.

The notes carry rates of Secured Overnight Financing Rate (SOFR) plus between 270 and 725 basis points and were listed on the Bermuda Stock Exchange this week.

This is the the first mortgage insurance linked securities (ILS) transaction since September 2022 and ninth issuance of mortgage insurance-linked notes sponsored by Essent Group subsidiary Essent Guaranty.

Essent reported a 25 percent drop in net income for the second quarter earlier this week.