$173m Resilience Re 1741A zero-coupon private cat bond issued

by Artemis on April 20, 2017

The latest private catastrophe bond issued through insurance, reinsurance and capital markets broker and advisory Willis Towers Watson’s platform has now completed, in the form of a $173 million Resilience Re Ltd. (Series 1741A) zero coupon transaction.

The Willis Towers Watson owned Resilience Re Ltd. private cat bond, or cat bond lite, issuance platform has been busy in recent months, with this the third transaction seen so far in 2017 and bringing the total risk capital issued through it to $423 million this year.

This new $173 million Resilience Re 1741A private cat bond is the sixth deal on the Willis Towers Watson Securities operated private cat bond platform that we’ve seen and have details on listed in our Deal Directory.

This deal saw a single $173 million Series 1741A tranche of discounted zero-coupon participating notes issued by Resilience Re Ltd., with the notes subsequently admitted for listing on the Bermuda Stock Exchange (BSX) as Section V Insurance Related Securities.

The zero coupon discounted notes that were issued have been placed with qualified investors and are due April 6th 2018, so represent a reinsurance arrangement with a term of one year.

As is typical of the vast majority of privately placed catastrophe bond transactions, we assume that the $173 million Resilience Re 1741A notes provide an unnamed sponsor with collateralized reinsurance cover for certain property catastrophe reinsurance risks. However further details on the exact nature of this transaction are unavailable at this time.

Willis Towers Watson Securities will have played the roles of lead structuring agent and bookrunner for this private cat bond, enabling the sponsor and investors to transform a reinsurance arrangement into a securitised cat bond note with secondary liquidity possible thanks to the listing as well.

These private cat bond issuance platforms are becoming increasingly popular and with the deal sizes increasing it is becoming more common for cat bond sponsors that would have previously used the full 144A public issuance approach to utilise a platform like Resilience Re in order to gain more efficient access to the capital markets for reinsurance purposes, often to a select club of ILS funds or investors.

The discounted zero coupon note approach has benefits for both sponsors and investors, as the sponsor essentially funds the reinsurance premium up front providing the investor with a form of leverage, which can result in keener pricing and greater efficiency in the transaction.

We will update you should any further information about the sponsor or underlying perils featured in this new Resilience Re private cat bond deal become available.

You can read all about this Resilience Re Ltd. (Series 1741A) private cat bond and every other catastrophe bond, private or public 144A, transaction in the Artemis Deal Directory. It will not be fully included in all of our catastrophe bond and ILS market statistics due to the lack of available information.

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