NMI Holdings prices $242m ILN deal via Oaktown Re V

NMI Holdings has priced a $242 million deal for 10-year mortgage insurance-linked notes, issued by Oaktown Re V, a newly formed Bermuda special-purpose insurer.

The ILNs consist of $69,676,000 class M-1A notes with an initial interest rate of one-month Libor plus 2.40 percent; $78,764,000 class M-1B notes with an initial interest rate of one-month Libor plus 3.60 percent; $78,764,000 class M-2 notes with an initial interest rate of one-month Libor plus 5.25 percent; and $15,147,000 class B-1 notes with an initial interest rate of one-month Libor plus 7.00 percent.

NMIH’s wholly owned subsidiary, National Mortgage Insurance Corporation (National MI), will receive $242 million of fully collateralised excess of loss reinsurance protection from Oaktown Re V, covering an existing portfolio of mortgage insurance policies written primarily from April 2020 through September 2020.

The excess of loss reinsurance coverage provides National MI protection for aggregate losses on subject loans beginning at a 2.00 percent cumulative claim rate threshold and continuing up to an eventual 6.25 percent aggregate detachment level.

The transaction is expected to close on October 29, 2020, subject to customary conditions.

The notes were offered for sale to eligible third-party investors in an unregistered private offering. The ILNs 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.

Oaktown Re V is not a subsidiary or affiliate of NMIH.