Willis cat bond platform issues $37m Resilience Re 1761A notes

Insurance, reinsurance and capital markets broker and advisory Willis Towers Watson’s private catastrophe bond issuance platform has successfully completed another deal, the brokers fourth so far this year, a $37 million Resilience Re Ltd. (Series 1761A) transaction.

Resilience Re Ltd. is a private cat bond, or cat bond lite, issuance platform that was established by the Willis Towers Watson Securities team as a way to help ceding companies gain access to capital markets capacity in an efficient manner, while also offering capital markets investors a way to access securitised tranches of insurance and reinsurance risk.

The platform has been well used, with seven Resilience Re transactions now listed in our catastrophe bond Deal Directory.

This new deal saw a single $37 million Series 1761A tranche of discounted zero-coupon participating notes issued by Resilience Re Ltd., with the notes then 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 June 4th 2018, so represent a reinsurance arrangement with a term of roughly one year.

This could be a renewal of last years $34 million Resilience Re Ltd. (Series 1661A) transaction, an assumption we make purely going on the last few digits of the series that tend to denote cells within the issuance vehicle (so we could just as easily be wrong). If it is a renewal then it also represents a slight increase in size of the transaction, which is positive to see.

As is typical of the most privately catastrophe bond transactions, we assume that the $37 million Resilience Re 1761A notes give an unnamed ceding company or sponsor a way to access collateralized reinsurance cover from the capital markets for losses from certain property catastrophe reinsurance exposures.

As ever with these private deals, exact details on the nature of this transaction are unavailable at this time.

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

The discounted zero coupon note structure used in this and many other similar transactions has benefits for both sponsors and investors. The sponsor essentially funds the reinsurance premium up front, providing the investor with a form of leverage, which can even result in keener pricing and greater transactional efficiency.

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 1761A) 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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