Essent Group amended its credit facility, increasing the total facility from $500 million to $625 million with specific terms. JPMorgan, Bank of America Securities and RBC Capital Markets acted as joint lead arrangers and joint bookrunners for the credit facility. Associated Bank, Citizens Bank, KeyBanc Capital Markets and U.S. Bank National Association also acted as joint lead arrangers.
The terms include:
- An increase in the revolving credit facility from $275 million to $300 million
- The issuance of an additional $100 million non-amortizing term loan
- The revolving credit facility and term loans maturing concurrently in October 2023
- An option to increase the credit facility to $775 million
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The proceeds of the additional term loan issued, as well as cash at its holding company, were used at closing to pay down all amounts drawn under the revolving credit facility. Borrowings under the credit facility are available for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries.
“We are very pleased with the amended terms of the facility, which we believe are reflective of Essent’s strong financial profile,” Mark Casale, chairman and CEO of Essent, said. “The increase of the commitment under the credit facility, and the extension of the maturity to October 2023, further enhances our already strong capital and liquidity position and adds to our financial flexibility.”
Borrowings under the revolving credit facility and term loan will accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the company’s option, plus an applicable margin. On the closing date, the minimum interest rate for any borrowings was one-month LIBOR plus 2%. The obligations under the credit facility are secured by certain assets of Essent Group, excluding the stock and assets of its insurance and reinsurance subsidiaries.
Essent Group is a Bermuda-based holding company which, through its wholly-owned subsidiary, Essent Guaranty, offers private mortgage insurance for single-family mortgage loans in the United States.
