Twelve Capital completes new $9.269m Dodeka XV private cat bond

by Artemis on June 22, 2018

Another Dodeka private catastrophe bond transaction has been completed by Twelve Capital Management, the Zurich headquartered insurance and reinsurance linked investment fund manager, with a $9.269 million Dodeka XV placed, becoming the seventeenth such ILS deal from the manager to-date.

Twelve Capital uses these privately securitized and placed arrangements to transform property catastrophe reinsurance or retrocession risks into an investable form that suits its liquid cat bond focused ILS funds or specific third-party investor mandates.

Including this new seventeenth Dodeka transaction, ILS manager Twelve Capital has now securitized over $330 million of reinsurance risk through the Dodeka series of private cat bonds, or cat bond lites.

Like previous deals, this Dodeka XV transaction has been issued through the Artex SAC Limited vehicle, managed by ILS facilitator Artex, with Dodeka XV representing a single segregated account of the issuance vehicle.

The underlying risks featured in the segregated account have been transformed into private ILS or cat bond form, resulting in the issuance of $9.269 million of tradable and listed principal-at-risk ILS notes.

The $9.269 million of Dodeka XV insurance-linked notes have a due date of the 27th December 2018, so appear to represent a reinsurance or retrocession contract designed to provide coverage across the duration of the U.S. hurricane season, we assume.

Dodeka XV’s $9.269 million of notes have been admitted to the Bermuda Stock Exchange (BSX) as Section V Insurance Related Securities and the notes have been placed with qualified ILS investors, which will be certain funds or accounts managed by Twelve Capital.

As is typical of the Dodeka series of private ILS deals, we assume that this Dodeka XV cat bond lite features a transformed industry-loss warranty (ILW) contract, using a PCS industry loss trigger and covering U.S. natural catastrophe risks (likely U.S. wind given the risk period, although we cannot be certain of this).

The series of Dodeka private cat bonds gives ILS manager Twelve Capital an efficient way to offer capital markets backed reinsurance coverage to reinsurance and retrocession counterparties, while sourcing risk in securitised note form with potential liquidity for its investment funds.

We’ve added this $9.269 million Dodeka XV private cat bond to the Artemis Deal Directory and what information we have will be included in our catastrophe bond and ILS market statistics.

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