MGIC Investment Corp. announced the pricing of $315.7 million of 10-year mortgage insurance-linked securities issued by Home Re 2019‑1 Ltd., a newly formed Bermuda special purpose insurer.
Wholly owned subsidiary Mortgage Guaranty Insurance Corp. will receive $315.7 million of fully collateralized excess of loss reinsurance protection from Home Re. The reinsurance covers an existing portfolio of mortgage insurance policies written with an insurance coverage in-force date on or after Jan. 1, 2018, but before April 1.
The $148.6 million class M-1 tranche has an initial interest rate of one-month London interbank offered rate plus 165 basis points; the $148.6 million class M-2 tranche carries an initial interest rate of one-month Libor plus 325 basis points; and the $18.6 million class B-1 tranche has an initial interest rate of one-month Libor plus 435 basis points.
The offering is expected to close May 29, subject to customary conditions.