Radian Closes $353 Million Notes Transaction
Radian Group Inc. announced that its wholly owned subsidiary, Radian Guaranty Inc. has obtained $353 million of fully collateralized excess of loss reinsurance coverage from Eagle Re 2023-1 Ltd.
A spokesperson said, “The excess of loss reinsurance covers eligible mortgage insurance policies written by Radian Guaranty from April 1 to December 31, 2022. Eagle Re is a newly formed Bermuda special purpose insurer and is not a subsidiary or affiliate of Radian Guaranty.
“Eagle Re has funded its reinsurance obligations by issuing four classes of mortgage insurance-linked notes [ILNs] with a 10-year maturity and 5-year call option to eligible third-party capital markets investors in an unregistered private offering. The ILNs are non-recourse to Radian Group and its subsidiaries and affiliates.
“The ILNs issued by Eagle Re consist of the following four classes:
- $110,337,000 Class M-1A Notes with a coupon equal to one-month SOFR plus 200 basis points
- $145,644,000 Class M-1B Notes with a coupon equal to one-month SOFR plus 395 basis points
- $75,029,000 Class M-2 Notes with a coupon equal to one-month SOFR plus 520 basis points
- $22,067,000 Class B-1 Notes with a coupon equal to one-month SOFR plus 685 basis points
“After closing, investors have the option to exchange their M-1B Notes for proportionate interests in Class M-1B-1 Notes, Class M-1B-2 Notes and Class M-1B-3 Notes [Exchangeable Notes], and the Exchangeable Notes may be exchanged for Class M-1B Notes with the same proportionate interest.
“The Notes have been assigned ratings by DBRS, Inc. [DBRS Morningstar] of BBB [low] [sf] for Class M-1A; BB [sf] for Class M-1B; B [high] [sf] for Class M-2; and B [sf] for Class B-1 [sf].”
