Essent Group Ltd. Announces Closing of $473.2 Million Reinsurance Transaction and Related Mortgage Insurance-Linked Notes
The senior M-1A class notes have received a rating of A- from Morningstar Credit Ratings, LLC.
Essent Group Ltd. (NYSE: ESNT) announced today that its wholly owned
subsidiary, Essent Guaranty, Inc., has obtained $473.2 million of fully
collateralized excess of loss reinsurance coverage on mortgage insurance
policies written by Essent in 2018 from Radnor Re 2019-1 Ltd., a newly
formed Bermuda special purpose insurer. Radnor Re 2019-1 Ltd. is not a
subsidiary or an affiliate of Essent Group Ltd.
Radnor Re 2019-1 Ltd. 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. The senior M-1A class
notes have received a rating of A- from Morningstar Credit Ratings, LLC.
The mortgage insurance-linked notes issued by Radnor Re 2019-1 Ltd.
consist of the following four classes:
-
$84,547,000 Class M-1A Notes with an initial interest rate of
one-month LIBOR 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.
The securities described herein have not been and will not be registered
under the U.S. Securities Act of 1933 and may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements. This press release shall not constitute an
offer to sell or a solicitation of an offer to buy any of the
aforementioned securities and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which, or to any
person to whom, such an offer, solicitation or sale would be unlawful.
Forward-Looking Statements
This press release may include “forward-looking statements” which are
subject to known and unknown risks and uncertainties, many of which may
be beyond our control. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may,"
"will," “should,” “expect,” "plan," "anticipate," "believe," “estimate,”
“predict,” or "potential" or the negative thereof or variations thereon
or similar terminology. Actual events, results and outcomes may differ
materially from our expectations due to a variety of known and unknown
risks, uncertainties and other factors. Although it is not possible to
identify all of these risks and factors, they include, among others, the
following: changes in or to Fannie Mae and Freddie Mac (the “GSEs”),
whether through Federal legislation, restructurings or a shift in
business practices; failure to continue to meet the mortgage insurer
eligibility requirements of the GSEs; competition for customers; lenders
or investors seeking alternatives to private mortgage insurance; an
increase in the number of loans insured through Federal government
mortgage insurance programs, including those offered by the Federal
Housing Administration; decline in new insurance written and franchise
value due to loss of a significant customer; decline in the volume of
low down payment mortgage originations; the definition of "Qualified
Mortgage" reducing the size of the mortgage origination market or
creating incentives to use government mortgage insurance programs; the
definition of "Qualified Residential Mortgage" reducing the number of
low down payment loans or lenders and investors seeking alternatives to
private mortgage insurance; the implementation of the Basel III Capital
Accord discouraging the use of private mortgage insurance; a decrease in
the length of time that insurance policies are in force; uncertainty of
loss reserve estimates; deteriorating economic conditions; our non-U.S.
operations becoming subject to U.S. Federal income taxation; becoming
considered a passive foreign investment company for U.S. Federal income
tax purposes; and other risks and factors described in Part I, Item 1A
“Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2018 filed with the Securities and Exchange Commission on
February 19, 2019. Any forward-looking information presented herein is
made only as of the date of this press release, and we do not undertake
any obligation to update or revise any forward-looking information to
reflect changes in assumptions, the occurrence of unanticipated events,
or otherwise.
About the Company
Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company
(collectively with its subsidiaries, “Essent”) which, through its
wholly-owned subsidiary, Essent Guaranty, Inc., offers private mortgage
insurance for single-family mortgage loans in the United States. Essent
provides private capital to mitigate mortgage credit risk, allowing
lenders to make additional mortgage financing available to prospective
homeowners. Headquartered in Radnor, Pennsylvania, Essent Guaranty, Inc.
is licensed to write mortgage insurance in all 50 states and the
District of Columbia, and is approved by Fannie Mae and Freddie Mac.
Essent also offers mortgage-related insurance, reinsurance and advisory
services through its Bermuda-based subsidiary, Essent Reinsurance Ltd.
Additional information regarding Essent may be found at www.essentgroup.com
and www.essent.us.
Source: Essent Group Ltd.
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