ATLANTICLUX’s SQ ReVita ViF and Salam III Sukuk ILS deals affirmed

by Artemis on July 9, 2015

Fitch Ratings has affirmed two insurance-linked securities (ILS) transactions from Luxembourg-based life and annuity focused insurer ATLANTICLUX Lebensversicherung S.A., the SQ ReVita value-in-force (ViF) life securitisation and the Salam III Sukuk (Islamic bond).

Fitch affirmed ATLANTICLUX’s rating and said that as the SQ ReVita and Salam III Sukuk ILS transactions are both rated at the same level as the sponsors Long-term Issuer Default Rating it treats them both as effectively having the same credit characteristics as a senior unsecured corporate obligation of ATLANTICLUX.

The SQ ReVita transaction was the first syndicated securitization of value of in-force to be placed with capital market investors since the outbreak of the financial crisis in 2008. As such it has been considered a ground-breaking transaction, with the deal having been structured by ILS specialists Secquaero Advisors Ltd.

The Salam III Sukuk ILS securitization of in-force life insurance policies was completed in 2013 and also seen as a ground breaking transaction, given it remains the only insurance-linked securitization (ILS) of takaful (Sharia’a-compliant) insurance policies and the only ILS transacted as an Islamic bond, or Sukuk.

Fitch noted that it applies the same rating due to the ILS transactions “partly recourse nature, and what Fitch views as a lack of bankruptcy remoteness in the structures.”

As a result Fitch affirmed both the SQ ReVita value of business in-force (ViF) transaction and the Salam III Sukuk (Islamic bond) programme at ‘BBB’.

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