Home loan insurance group NMI Holdings, Inc. has finished its newest capital markets backed reinsurance deal, effectively closing its sixth home loan insurance-linked notes transaction, a $367 million Oaktown Re VI Ltd., on target.As we discussed 10 days ago, NMI Holdings was back in the insurance-linked securities (ILS) market searching for more collateralized home mortgage reinsurance security with this new offer.
Its the sixth time NMI has looked for reinsurance for its wholly owned subsidiary National Mortgage Insurance Corporation through these Oaktown Re deals.
Details of every Oaktown Re home loan ILS deal can be found in our extensive insurance-linked securities (ILS) Deal Directory.
NMI signed up Oaktown Re VI Ltd., a Bermuda special-purpose insurance provider, for this issuance of five tranches of notes that are linked to the efficiency of its mortgage insurance coverage book.
Now, the 5 tranches have been released effectively by Oaktown Re VI Ltd. and placed with third-party investors, with the earnings collateralizing underlying reinsurance arrangements in between the SPI and National Mortgage Insurance Corporation.
The home loan insurance-linked notes issued by Oaktown Re VI Ltd. have a 12.5-year legal maturity and the offer consists of, with ratings from Moodys:
The deal means that subsidiary National Mortgage Insurance Corporation (National MI) will receive $367 countless fully collateralized excess of loss reinsurance security from Oaktown Re VI.
The reinsurance covers an existing portfolio of mortgage insurance coverage policies, which were underwritten mostly between October 1, 2020 through March 31, 2021.
The excess of loss reinsurance covers aggregate losses on subject loans starting at a 1.85% cumulative claim rate threshold and continuing approximately an ultimate 6.75% aggregate detachment level.
National MI stated that it anticipates receiving initial PMIERs credit for the portion of protection attaching within the existing risk-based necessary asset charge on subject loans and extra advantage in the future if the PMIERs requirement on subject loans boosts.
With the conclusion of this newest home mortgage ILS deal, issuance of home mortgage insurance-linked notes now stands at over $2.64 billion year-to-date, which compares to practically $3.9 billion or 144A property disaster bonds, $350 million of other cat bond structured offers, and $271 countless personal feline bonds all successfully released so far in 2021, according to Artemis data.
You can check out all about this new Oaktown Re VI Ltd. home loan ILS transaction from NMI Holdings and every other home mortgage ILS deal our extensive disaster bond and insurance-linked security Deal Directory.
$ 88.5 m, Class M-1A, SOFR +165, Assigned Baa2 (sf).
$ 199.5 m Class M-1B, SOFR +205, Assigned Baa3 (sf).
$ 70.8 m, Class M-1C, SOFR +300, Assigned Ba2 (sf).
$ 66.4 m, Class M-2, SOFR +395, Assigned B2 (sf).
$ 22.1 m, Class B-1, SOFR +550, Assigned B3 (sf).