Dodeka XVII

This $18.322 million Dodeka XVII private catastrophe bond transaction is the nineteenth private ILS deal in the Dodeka series from ILS investment fund manager Twelve Capital, as the company persists in demonstrting its commitment to sourcing risk in securitised cat bond form for its ILS fund investors.

Including this new nineteenth Dodeka private ILS transaction, Twelve Capital has now securitized roughly $358 million of reinsurance risk through this series of private cat bonds, or cat bond lites, since the first Dodeka in January 2014.

As with other recent Dodeka transactions, the Dodeka XVII private cat bond has been issued using Artex’s SAC Limited vehicle, managed by ILS facilitator Artex, with Dodeka XVII representing a single segregated account of this issuing vehicle.

The underlying catastrophic peril exposure in the segregated account has been transformed into private ILS or cat bond form, resulting in the issuance of the $18.322 million of tradable and listed principal-at-risk ILS notes.

The $18.322 million of Dodeka XVII insurance-linked notes have a due date of the 27th December 2018, so likely represent a reinsurance or retrocession contract designed to provide coverage across the duration of the U.S. wind season.

It is interesting to note the due or maturity date, as this is the same as was seen for the two previous Dodeka’s, the $9.6m Dodeka XVI and the almost $9.3m Dodeka XV.

The reason for this is unknown, but it is possible that Twelve Capital has been securitising tranches of a larger retrocessional reinsurance arrangement secured at the mid-year renewals, either being part of the same reinsurance layer or tower, or a similar structure, with each slice being securitised and transformed at different times. However, we cannot confirm this.

Dodeka XVII’s $18.322 million of notes were admitted to the Bermuda Stock Exchange (BSX) as Section V Insurance Related Securities after the notes were sold to qualified ILS investors, which will be funds or managed accounts operated by Twelve Capital.

As with all of the Dodeka series of private ILS deals, we assume that this Dodeka XVII cat bond lite features a transformed industry-loss warranty (ILW) contract, using a PCS industry loss trigger and covering U.S. natural catastrophe risks (which is most likely U.S. wind because of the risk period).