Radian prices $484m Eagle Re 2021-2 mortgage ILS deal

Radian prices $484m Eagle Re 2021-2 mortgage ILS deal

Radian Group is back in the capital markets in search of more collateralized mortgage reinsurance for its Radian Guaranty subsidiary, with a $484 million target for an Eagle Re 2021-2 Ltd. issuance of home loan insurance-linked securities (ILS). This brand-new home mortgage insurance-linked notes transaction will be Radian Guarantys 6th and if successful it will indicate the mortgage insurer will have protected nearly $2.9 billion of multi-year excess-of-loss home loan reinsurance protection from the capital markets through its Eagle Re series of deals.
All are detailed in the Artemis Deal Directory, which you can filter by sponsor, or type of transaction to display just mortgage ILS deals.
For its second issuance of home mortgage insurance-linked notes in 2021, Radian has established a new Bermuda based special purpose insurer, Eagle Re 2021-2 Ltd. (EMIR 2021-2), through which five primary tranches of home mortgage ILS securities will be provided.
The resulting notes, of which there are expected to be around $484 million, will be sold to capital market investors. Each tranche of notes have now been priced and the offering settles in just over one-week.
The earnings from their sale will be used to collateralize mortgage reinsurance arrangements between Eagle Re 2021-2 and Radian Guaranty, offering the insurance company with a source of excess-of-loss home loan reinsurance protection across a variety of accessory levels, covering it versus a considerable or unexpected rise in home loan insurance coverage claims.
As with other mortgage ILS offers, among the tranches offered may be converted into three separate coverage layers of notes after the issuance finishes, while an additional layer might be provided to increase the size of the offering, if financier cravings suffices.
Home mortgage ILS offers have actually ended up being more intricate this year, as sponsors have discovered new ways to tier their reinsurance protection utilizing securitization technology, while likewise pleasing the danger hungers of various investors.
The deal breaks down as follows, with the imprint showing the M-1C layer that may be divided equally across 3 coverage levels:

Score agency DBRS Morningstar described the danger profile of this new mortgage ILS, “The Notes are exposed to the threat arising from losses the Ceding Insurer pays to settle claims on the underlying MI policies. As of the cut-off date, the pool of insured home mortgage loans consists of 153,373 completely amortizing first-lien repaired- and variable-rate mortgages. They all have been underwritten to a complete paperwork standard, have initial loan-to-value ratios less than or equal to 97%, have never ever been reported to the Ceding Insurer as 60 or more days overdue, and have actually never been reported to be in a payment forbearance strategy as of the cut-off date. The home loan loans have MI policies efficient on or after August 2020 and on or before July 2021.”.

Score firm DBRS Morningstar explained the danger profile of this brand-new home loan ILS, “The Notes are exposed to the threat arising from losses the Ceding Insurer pays to settle claims on the underlying MI policies. As of the cut-off date, the pool of insured home loan loans consists of 153,373 totally amortizing first-lien repaired- and variable-rate home mortgages. They all have actually been underwritten to a full paperwork requirement, have initial loan-to-value ratios less than or equal to 97%, have never been reported to the Ceding Insurer as 60 or more days overdue, and have never been reported to be in a payment forbearance strategy since the cut-off date. The mortgage have MI policies reliable on or after August 2020 and on or prior to July 2021.”.
When the notes are issued, Eagle Re 2021-2 will get in into the excess-of-loss home mortgage reinsurance plans with Radian, which will run across and amortize over a 12.5-year term.
The market for mortgage insurance-linked securities (ILS) continues to be buoyant and investor interest in this sector continues to expand.
Capital markets backed reinsurance funding, secured through home mortgage ILS offers like the Eagle Re series, has actually become an essential lever for the United States home loan insurance coverage market, helping it broaden while securing insurer PMLs and, importantly, as Radian has actually stated before, providing access to a capability source that assists eventually lower its own cost-of-capital.
You can read all about the Eagle Re 2021-2 Ltd. home loan ILS transaction and every other home loan ILS offer in the Artemis Deal Directory.

$ 48.4 million Class M-1C-1 (DBRS Morningstar: BB (high) (sf); Moodys: Ba1 (sf)).
$ 48.4 million Class M-1C-2 (DBRS Morningstar: BB (high) (sf); Moodys: Ba2 (sf)).
$ 48.4 million Class M-1C-3 (DBRS Morningstar: BB (sf); Moodys: Ba3 (sf)).

$ 91.4 million Class M-2, priced at one-month SOFR plus 425 basis points (DBRS Morningstar: B (high) (sf); Moodys: B2 (sf)).
$ 26.9 million Class B-1, priced at one-month SOFR plus 500 basis points (DBRS Morningstar: B (sf)).

$ 118.3 million Class M-1A, priced at one-month SOFR plus 155 basis points (DBRS Morningstar: BBB (high) (sf); Moodys: Baa1 (sf)).
$ 102.2 million Class M-1B, priced at one-month SOFR plus 205 basis points (DBRS Morningstar: BBB (low) (sf); Moodys: Baa3 (sf) ).
$ 145.2 million Class M-1C, priced at one-month SOFR plus 345 basis points (DBRS Morningstar: BB (sf); Moodys: Ba2 (sf)).

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!