Seaside Re 2017-3 private cat bond maturity extended again

by Artemis on April 5, 2018

The maturity date has been extended again for the $50 million Seaside Re 2017-3 transaction, which is a private catastrophe bond issued using German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., likely to allow for loss development to continue.

This $50 million Seaside Re 2017-3 private cat bond was issued by Hannover Re’s reinsurance vehicle Kaith Re Ltd. in January 2017, acting on behalf of the segregated account Seaside Re to issue a single $50 million tranche of Series 2017-3 private cat bond notes for ILS investors.

Back in January we reported that the Series 2017-3 notes issued by Seaside Re had not been allowed to mature as scheduled, with their maturity pushed back, suggesting that time was required for loss development, to clarify whether losses are faced and to identify whether investors in the notes would receive all of their investment principal back when the notes are finally allowed to mature.

Now the maturity date has been pushed back again, with the $50 million of Seaside Re 2017-3 private cat bond notes now scheduled for maturity on June 30th 2018.

With the Seaside Re bond program providing investors with access to U.S. property catastrophe reinsurance related risks, it seems safe to assume that this private cat bond is exposed to losses from events such as the three major hurricanes of 2017, possibly also to the wildfires in California as well if a multi-peril arrangement.

Given the private nature of the Seaside cat bond deals the full details of the structure are not known. But often these private arrangements feature industry loss triggers, so it could be that further updates from a data provider such as PCS are required to determine whether it faces a loss or not. The alternative is that it’s an indemnity arrangement, with clarity of the ceding companies losses required to determine any loss payment due.

This $50 million Seaside Re 2017-3 tranche of notes was part of an issuance of a trio of Seaside Re 2017 private cat bonds, but just this tranche was extended, suggesting that more time is required for loss development to clarify whether losses are faced and identify whether investors will receive all of their investment principal back when the notes are finally allowed to mature.

This Seaside Re 2017-3 private cat bond is featured in our listing of cat bond payouts and defaults, where you can find details of all catastrophe bonds triggered and payouts made, since the market began.

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