Radian issues $390m of ILNs via Eagle Re

26-10-2020

Radian Guaranty, a wholly owned subsidiary of the Radian Group, has obtained $390 million of fully collateralised excess of loss reinsurance coverage from Eagle Re 2020-2, a Bermuda-based special purpose insurer. 

The excess of loss reinsurance covers eligible mortgage insurance policies written by Radian Guaranty in October 2019 through July 2020, excluding single premium payment policies.

Eagle Re funded its reinsurance obligations by issuing five classes of mortgage insurance-linked notes (ILNs) with a 10-year maturity and seven-year call option. 

The ILNs are non-recourse to Radian Group and its subsidiaries and affiliates. They comprise $130,108,000 class M-1A notes with a coupon equal to one-month Libor plus 300 basis points; $65,054,000 class M-1B notes with a coupon equal to one-month Libor plus 400 basis points; $65,054,000 class M-1C notes with a coupon equal to one-month Libor plus 450 basis points; $97,581,000 class M-2 notes with a coupon equal to one-month Libor plus 560 basis points; and $32,527,000 class B-1 notes with a coupon equal to one-month Libor plus 700 basis points. 

The ILNs were sold to eligible third-party capital markets investors in an unregistered private offering. After closing, investors have the option to exchange their M-2 notes for proportionate interests in class M-2A notes, class M-2B notes and class M-2C notes. The exchangeable notes may be exchanged for class M-2 notes with the same proportionate interest.

In February Eagle Re funded $488 million of fully collateralised excess of loss reinsurance coverage for Radian Guaranty.

Radian Group provides mortgage insurance and other mortgage, risk, title, valuation, asset management and real estate services. Eagle Re is affiliated with Radian.

Radian Guaranty, Insurance linked notes, ILN, Eagle Re 2020-2

Bermuda Re