Enact gets strong demand for $248m Triangle Re 2023-1 mortgage ILS

Enact Mortgage Insurance has successfully closed its new issuance of Mortgage Insurance Linked Securities (ILS), securing $248 million in collateralized mortgage reinsurance protection from the capital markets with the issuance of Triangle Re 2023-1 Ltd. notes related to mortgage insurance.

promulgate-mortgage-insurance-logoEnact President and CEO Rohit Gupta said demand was strong from investors and reinsurers for the notes as this mortgage ILS market continues to see momentum build after a disruption due to the pandemic and the volatile period in the capital markets.

As we reported at the beginning of the month, it’s sixth issuance of Triangle Re’s mortgage insurance-linked securities (ILS) for Enact Mortgage Insurance Corporationformerly known as Genworth Mortgage Insurance.

Genworth had previously sponsored five Triangle Re mortgage insurance-linked note offerings as it sought secured mortgage reinsurance until September 2021, after which it was renamed Enact.

Since then, like all other major US mortgage insurers, Enact has stayed out of the mortgage ILS market and has only returned to it now, at a time when market conditions have improved and issuance of THEY mortgages have resumed.

The return was successful and Enact priced and completed the transaction on time.

This issuance provides Enact with $248 million of fully guaranteed excess-of-loss reinsurance, through the issuance of Triangle Re 2023-1 Ltd. insurance-linked notes, covering the mortgage insurance risk of a portfolio of policies existing seasoned mortgage insurance policies purchased from July 1, 2022 to June 30, 2023.

The company explained that Triangle Re 2023-1 funded the necessary reinsurance obligations by issuing four classes of mortgage insurance-linked notes, which have a statutory maturity of 10 years and a 5-year call option, to investors qualified institutional investors in an unregistered private offering.

The final rounded tranches and their prices can be seen below:

  • $106 million Class M-1A notes with an initial interest rate of one-month SOFR plus 340 basis points
  • $69 million Class M-1B notes with an initial interest rate of one-month SOFR plus 525 basis points
  • $55 million Class M-2 notes with an initial interest rate of one month SOFR plus 650 basis points
  • $18 million Class B-1 notes with an initial interest rate of one month SOFR plus 740 basis points

“This Triangle Re transaction marks the sixth ILN issuance for Enact and we are very pleased with the placement which has attracted strong interest from investors and reinsurers,” explained Rohit Gupta, President and CEO of Enact. “This transaction builds on the success of our CRT program, demonstrates our ability to access capital markets and further enhances the flexibility and efficiency of our capital structure for the benefit of our clients and shareholders.

As our updated chart now shows, issuance of mortgage insurance-linked securities (ILS) stands at approximately $1.4 billion in 2023. so far and now ahead of last year’s total.

You can read everything on Triangle Re 2023-1 Ltd. mortgage insurance related securities transaction and all other mortgage ILS transactions in our specific directory of ILS mortgage offersas well as in our global Directory of Artemis offers.

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