$150m Resilience Re 1841A private catastrophe bond issued

by Artemis on April 27, 2018

The private catastrophe bond issuance platform Resilience Re, which is owned and operated by insurance and reinsurance broker Willis Towers Watson, has issued its latest transaction, a $150 million Resilience Re Ltd. (Series 1841A) zero-coupon deal.

Private catastrophe bond issuance has been dominated by the Willis Towers Watson Securities operated Resilience Re Ltd. platform so far this year, with the three issues now totaling $262.6 million of risk capital issued through the three transactions so far in 2018 and the tenth transaction in total from the platform that we have listed in our catastrophe bond Deal Directory.

As usual, details are scarce, given the privately negotiated and placed nature of these cat bonds, but we can assume as always that the transaction sees a sponsor benefitting from efficient access to collateralized reinsurance or retrocession cover from the capital markets, protecting it against losses from certain property catastrophe reinsurance exposures.

In this latest deal, Resilience Re Ltd. has issued a single $150 million tranche of Series 1841A discounted zero coupon notes, which have been placed with qualified investors and listed on the BSX as Section V – Insurance Related Securities.

The notes are due April 8th 2019, suggesting they cover a one-year reinsurance arrangement from the April renewal.

The discounted zero coupon note structure used in this and other similar private ILS transactions benefits both the sponsor of the cat bond and the investors.

The sponsor can fund the reinsurance premium up front, as it would in a typical collateralized reinsurance arrangement, which also provides the investor a form of leverage and as a result can help to drive keener pricing and enhanced transactional efficiency for both sides.

Willis Towers Watson Securities will have acted as the lead structuring agent and bookrunner for this private cat bond, structuring and facilitating the deal between sponsor and investors, through the transformation of a reinsurance arrangement into a securitised cat bond note with secondary liquidity features.

It’s possible that this Resilience Re 1841A private cat bond is from the same sponsor as last years $173 million Resilience Re Ltd. (Series 1741A) transaction, which is currently on watch for potential losses from 2017’s catastrophe events, after this transactions maturity was extended through to May 1st 2019. So this could be a renewal of that layer of cover for the same ceding company, although it’s impossible to be certain at this time.

You can read all about this $150 million Resilience Re Ltd. (Series 1841A) private cat bond and every other catastrophe bond, including private as well as public 144A, transaction in the Artemis Deal Directory.

This transaction 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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