CEA’s Embarcadero Re 2012-1 completes and notes list in Bermuda

by Artemis on February 6, 2012

The second California Earthquake Authority catastrophe bond to be issued through the dedicated Bermuda domiciled Embarcadero Re Ltd. SPV has completed successfully and the notes issued have been listed on the Bermuda Stock Exchange. The CEA returned to the cat bond market seeking another fully collateralized, multi-year tranche of reinsurance cover from the capital markets and were successful. The CEA had been looking for as much as $300m of cover in this second cat bond but opted for just $150m through Embarcadero Re Ltd. 2012-1.

The notes issued by Embarcadero Re in this second CEA cat bond provide them with annual aggregate coverage for U.S. earthquakes for a three-year risk period in California. The CEA now benefits from $300m of cat bond coverage in total, but it wouldn’t surprise us to see them return to the capital markets again during 2012, especially as they participate in renewals at mid-year.

James McKirdy, Chief Compliance Officer of the BSX said, “We are delighted to once again welcome Embarcadero Re and the Series 2012-1 Principal At-Risk Variable Notes to the Official List of the BSX. The BSX Listing Regulations for International Issuers of Insurance Related Securities are specifically designed to facilitate the listing of this type of Notes that are offered to institutional and sophisticated Qualified Investors.”

Standard & Poor’s affirmed the preliminary rating of ‘BB-‘ on the single tranche of Series 2012-1 Class A notes issued by Embarcadero Re.

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