Artex SAC platform issues $8.947m Series CX private cat bond notes

by Artemis on September 1, 2016

A new private catastrophe bond issuance has completed and listed in Bermuda using the Artex SAC Limited Note Program. $8.947m of Artex SAC Limited – Series CX Notes were listed on the Bermuda Stock Exchange (BSX) yesterday.

It’s the first private catastrophe bond, or cat bond lite deal, to be issued under the Artex SAC Limited name, since Artex Risk Solutions acquired Kane and renamed its private cat bond and ILS issuance platform in May.

As ever there is little information to share, being a privately transacted and placed cat bond issue. Typically these smaller deals can involve a single investor, often an ILS fund participating in a reinsurance renewal, that requires the reinsurance contract to be transformed into securitised, cat bond form for its portfolio.

This transaction consisting of $8.947m of notes have been issued by Artex SAC Limited using a Series CX Notes segregated account. The notes have been listed on the BSX as insurance related securities, and have a due date of 9th June 2017.

This could be a renewal of the Kane SAC Limited – Series Ax Notes which matured on the 10th June this year, so likely reflects a U.S. property catastrophe focused reinsurance contract.

The notes issued under the Series CX segregated account have been placed with qualified investors, as is typical of all catastrophe bond transactions.

Typically these deals involve peak catastrophic perils (often U.S.) and feature triggers  based either on an industry loss or indemnity structure basis.

Platforms such as Artex SAC Limited and its associated note programs enable investors and ILS fund managers to access risk in securitised, cat bond form more cheaply and from smaller transactions than the main 144A cat bond market would allow.

Many institutional investors have mandates that insist on secondary liquidity in their ILS investments. Also ILS managers operate cat bond focused funds with liquidity restrictions on the investments they can make. This makes a securitised note the preferred option to deploying capital into collateralised reinsurance, hence the transformation to private cat bond notes on these platforms to gain secondary transferability and to fit mandates.

This transaction has been added to our Deal Directory. If further information becomes available we will update you.

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