The London Stock Exchange is now ready to list insurance-linked securities (ILS) on its International Securities Market after putting in place the rules necessary to allow for listing of catastrophe bonds and other ILS securities.
With the UK now having its ILS regulatory framework in place and a number of transactions now completed, with the most recent being the first pure terror risk cat bond sponsored by government backed mutual reinsurance firm Pool Re, finding a home in the UK for listings of ILS notes is now also an option for any future sponsors.
Listing ILS securities such as cat bonds, or other securitised reinsurance transactions, can provide a greater level of liquidity and also help to meet certain institutional investor mandates.
A listing is not an essential piece of an ILS arrangement, but it tends to be a preferred option for all Rule 144A compatible ILS deals.
In an emailed statement Darko Hajdukovic, Head of Fixed Income, Funds & Analytics and UK Primary Markets at the London Stock Exchange commented, “We are delighted that insurance linked securities (ILS) can now be listed on London Stock Exchange’s International Securities Market.
“The ability to create and list ILS in London further expands our offering and reinforces our role as the leading international financial centre.”
Of course London is already an international insurance and reinsurance centre. So with ILS business now also possible to be issued there, adding the ability to list the issued notes on a recognised exchange in the same country of issue will be an added benefit for UK ILS issuers.
The rules to allow for ILS listings on the London Stock Exchange came into effect in late February, another step in the journey of the UK to provide a full suite of ILS related services for issuers.
Hajdukovic explained, “We continue to focus on benefits to our clients. The new product offering will support insurers in optimising their risk management strategies in the global reinsurance market and lower the cost for our clients.”