New series of private cat bond notes issued on Kane SAC platform

by Artemis on January 27, 2014

A $50.12m series of private catastrophe bond notes has been issued through the Kane SAC Limited Note Program, a platform that global independent insurance manager Kane established to assist private insurance-linked securities (ILS) sponsors.

Kane SAC Limited (Kane SAC), a subsidiary of Kane, has announced the issuance of the $50.12m Series 1-2014 notes through its independent private catastrophe bond platform, the Kane SAC Limited Note Program. The series of notes, which has been formed through the transformation of a segregated account have a term of just over one year, being due on the 7th April 2015.

Kane launched its private cat bond platform last August, with a first issuance which featured just over $9.5m of notes with the underlying risk ceded from the Texas Windstorm Insurance Association (TWIA), a newcomer to the cat bond market although the impetus behind this deal did not come from TWIA itself.

That first transaction was structured to suit an investor or collateralized source of capacity, which had participated in TWIA’s mid-year reinsurance renewals but had a mandate to invest in insurance-linked securities with secondary liquidity, rather than just a collateralized reinsurance contract.

The Kane platform was also used recently by Swiss ILS specialist investment manager Twelve Capital for its first private catastrophe bond issuance, Dodeka I, a $25m (including the premium) zero-coupon private cat bond issued using the Kane SAC Limited private cat bond platform.

The Dodeka I private cat bond is effectively a transformed industry loss warranty, so uses an industry loss trigger based on Property Claim Services (PCS) catastrophe report data.

The $50.12m 1-2014 series of private cat bond notes have been listed on the Bermuda Stock Exchange. Appleby Securities (Bermuda) Ltd. acted as the listing sponsor for this private cat bond issuance.

Robert Eastham, Managing Director, Kane (Bermuda) Limited, commented on the deal; “We are delighted to be able to announce the second Notes issuance through the Kane SAC Limited Note Program less than six months since its launch. This clearly demonstrates investor need for an efficient and cost-effective mechanism for both the structuring and listing of smaller private transactions. We look forward to announcing further transactions in the coming months.”

No further details have been revealed on the underlying perils, the type of trigger or the riskiness of the layer transformed in this private cat bond deal. If any more information becomes available we will update you.

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