PMI Mortgage Insurance Company (PMI Europe) has completed its first German transaction, a mortgage credit default swap agreement with European bank Commerzbank Securities.
PMI Mortgage Insurance Company (PMI Europe), the PMI Group's AA rated mortgage insurance subsidiary, has completed its first German transaction, a mortgage credit default swap agreement with European bank Commerzbank Securities.
The transaction saw PMI Europe assume €35.15m (£21.8m) of mortgage default risk on €1.35bn (£836.2m) of mortgage loans taken out by HVB Real Estate Bank, the mortgage-lending subsidiary of HypoVereinsbank.
The deal enables HVB Real Estate to transfer mortgage default risk to PMI Europe through Commerzbank Securities whilst maintaining the assets on its books. This frees up the lender's capital to provide further loans and will help to improve its overall return.
PMI Europe executive managing director Tony Porter said: "We are extremely pleased to have accomplished our first German transaction and our second transaction in just a few weeks.
"Over the coming months we intend to build upon our early success in the European market."
Last month, PMI Europe assumed $220m (£152.2m) of mortgage default risk on $1.5bn (£1.04bn) of mortgage loans in a credit default swap arrangement.
PMI Group's international insurance in force balance now exceeds €29bn (£18bn)
