$50m Seaside Re 2018-2 private cat bond issued by Kaith Re

by Artemis on January 2, 2018

A third private catastrophe bond transaction has now been issued through German reinsurance firm Hannover Re’s Kaith Re Ltd. Bermuda domiciled segregated accounts vehicle in December, with a $50 million Seaside Re (Series 2018-2) offering, exposed to U.S. property catastrophe risks.

This $50 million Seaside Re (Series 2018-2) private catastrophe bond, or cat bond lite, transaction, follows a $20 million Seaside Re (Series 2018-1) private cat bond and a $27 million Seaside Re (Series 2018-3)  deal, both of which were issued in the last week or so.

For this 2018-2 issuance, Hannover Re’s reinsurance vehicle Kaith Re Ltd. acted on behalf of a segregated account named Seaside Re to issue a single $50 million tranche of Series 2018-2 private cat bond notes for the ILS investor(s). The notes have been issued pursuant to the Seaside Re bond program, which was originally established and listed with a 2017-1 transaction.

The single $50 million tranche of Series 2018-2 notes issued by segregated account Seaside Re are due January 15th 2019, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are more frequently seen with private cat bonds. This is the same due-date as the Seaside Re 2018-1 and 2018-2 transactions which were completed and listed earlier in December.

The Seaside Re bond program provides investors with access to U.S. property catastrophe risks, but further details of the exact nature of this transaction and the reinsurance or retrocessional coverage it provides are unavailable at this time. Hannover Re acts as a risk transformer and facilitator in securitising property catastrophe risks with these deals.

It is possible that these Seaside Re transactions are a way for investors to participate in Hannover Re’s own retro program, given they all have the same due-dates.

This $50 million tranche of Series 2018-2 notes issued by Seaside Re have been admitted for listing on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities and have been placed with qualified ILS investors.

This is the sixth tranche of notes issued through the Seaside Re program from Hannover Re’s Kaith Re reinsurance transformer vehicle since it began issuing private, listed cat bonds.

We’ve added this $50 million Seaside Re (Series 2018-2) private cat bond to the Artemis Deal Directory and what information we have will be included in all of our catastrophe bond and ILS market statistics.

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