PMI, the US-based mortgage insurance company, is pushing into Europe with plans to offer European lenders a way of improving their return on equity by giving them regulatory capital relief on pools of mortgage loans.

PMI, a new entrant in the European market, has at least two deals in the pipeline. The first is a privately placed transaction in which it will guarantee the bulk of a £1bn (€1.6bn) portfolio of prime residential mortgages. The transaction will allow the mortgage originator - which PMI declined to name - to lay off the risk of the mortgage portfolio, which frees up set-aside capital to make more loans.