Kane SAC Limited – Tralee

This private ILS transaction involves a named segregated account from the Kane SAC Limited issuance vehicle. The roughly $17.6m of at risk notes that have been issued have a due date of the 20th July 2017, meaning this represents a two-year reinsurance contract.

These segregated account deals issued through the Kane SAC vehicles often relate to quota share reinsurance contracts, with the notes being preference shares issued by the vehicle.

Interestingly, the Tralee segregated account’s at risk notes are denominated in Japanese Yen. This could mean a number of things, perhaps that the transaction covers Japanese perils, that it has been arranged specifically for a Japanese investor, or that it has been arranged for an ILS fund’s JPY denominated share class. It’s not possible to confirm at this time.

The Tralee segregated account notes amount to JPY 2,161,455,130, which converts to just slightly over USD$17.6m. The notes have been admitted for listing on the Bermuda Stock Exchange (BSX).

As with so many of these private deals, Tralee likely involves an ILS fund manager, or reinsurer operated third-party capital unit, underwriting a reinsurance transaction on a fully-collaterallized basis and then using the Kane SAC notes platform to transform it into a liquid, transferable security form.

Given the timing of the issuance of the Tralee transaction, it’s likely that it relates to a July 1st reinsurance renewal contract.