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Essent Group Files for Initial Public Offering

SEP 17, 2013 11:50am ET
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Essent Group Ltd., the Hamilton, Bermuda-based parent of Essent Guaranty Inc., has filed an S-1 registration statement with the Securities and Exchange Commission to do an initial public offering. A press release from the company says the number of shares to be offered and the price range have not yet been determined.

The company said it is looking to be listed on the New York Stock Exchange.

Essent Group said in its filing, “Since writing our first policy in May 2010, we have grown to an estimated 12% market share based on new insurance written, or NIW, for the three months ended June 30, 2013, up from 8.6% and 3.9% for the years ended Dec. 31, 2012 and 2011, respectively.

“We believe that our growth has been driven largely by the unique opportunity we offer lenders to partner with a well-capitalized mortgage insurer, unencumbered by legacy business that provides fair and transparent claims payment practices, and consistency and speed of service.”

It said it has 800 customers, including 21 of the 25 top originators in the nation. As of June 30, Essent had over $22.5 billion of insurance in force.

MortgageStats.com data show Essent with NIW of $5.9 billion in 2Q13, just behind legacy MI company Genworth Financial, which did $6.2 billion. The No. 1 underwriter for the quarter, United Guaranty, did $13.8 billion.

Radian is second at $13.4 billion, while MGIC is now third at $8.1 billion. But MGIC’s management said it is ready to make a push to regain market share, even with the new competition brought by Essent, National MI and Arch.

The S-1 filing lists the following firms as investors in Essent: affiliates of Pine Brook Road Partners; Goldman Sachs Group Inc.; an affiliate of Global Atlantic Financial Group; Valorina LLC, which is majority owned by an entity that is managed by Soros Fund Management LLC; Aldermanbury Investments Limited; an affiliate of JPMorgan; an affiliate of PartnerRe Principal Finance Inc.; RenaissanceRe Ventures Ltd.; funds or accounts managed by Wellington Management Co. LLP; and affiliates of HSBC.

These entities collectively committed approximately $600 million in capital to fund Essent’s operations; the S-1 said it has drawn in the aggregate approximately $438 million of the available committed capital.

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