Radian Guaranty Inc., a wholly owned subsidiary of Radian Group Inc., has obtained $562 million of credit risk protection from Eagle Re 2019-1 Ltd. through the issuance by Eagle Re of mortgage insurance-linked notes (“ILNs”) to eligible third-party capital markets investors in an unregistered private offering.
Eagle Re is a special purpose insurer domiciled in Bermuda and is not a subsidiary or affiliate of Radian Guaranty.
Eagle Re funded its reinsurance obligations by issuing four classes of ILNs that have a 10-year maturity with a seven-year call option. The ILNs are non-recourse to Radian Group or its subsidiaries and affiliates.
The ILNs issued by Eagle Re consist of the following four classes:
- $107,054,000 Class M-1A Notes with a coupon equal to one-month LIBOR plus 125 basis points;
- $176,640,000 Class M-1B Notes with a coupon equal to one-month LIBOR plus 180 basis points;
- $235,520,000 Class M-2 Notes with a coupon equal to one-month LIBOR plus 330 basis points; and
- $42,822,000 Class B-1 Notes with a coupon equal to one-month LIBOR plus 450 basis points
The notes were assigned ratings of BBB+ for Class M-1A; BBB- for Class M-1B; BB- for Class M-2; and B+ for Class B-1 by Morningstar Credit Ratings LLC.
“We were once again pleased with the strong market demand for our ILN transaction,” said Radian's chief executive officer, Rick Thornberry. “The successful execution of Eagle Re 2019-1 is indicative of both the quality of the mortgage insurance we have written and the increasing breadth and depth of investors interested in this asset class.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].