Artex SAC Limited – Tenby Notes – Full details:
This is the first private catastrophe bond transaction we’ve seen from the Artex Risk Solutions owned segregated account reinsurance transformer platform Artex SAC Limited so far in 2020.
This private cat bond issuance (also termed a cat bond lite) has been completed and listed in Bermuda using the vehicle’s Artex SAC Limited ILS Note Program II.
This new transaction is the seventh we’ve listed in our Directory featuring the Artex owned segregated account company as issuer. The deal features $30 million of Artex SAC Limited – Tenby Notes, with the notes due October 10th 2022.
As ever, we assume a private cat bond issuance likes this consists of notes linked to certain property catastrophe risks, most likely representing a securitisation of either an indemnity or industry loss triggered collateralised reinsurance or retrocession transaction.
The transaction will have been securitised to make the investment compatible with certain ILS fund or investor mandates, offering the investors an option for secondary liquidity as well.
This Tenby transaction consists of $30 million of notes that were issued using the Artex SAC Limited vehicle and its ILS Note Program II, on behalf of a segregated account series named Tenby.
The notes have been placed with qualified investors and listed on the Bermuda Stock Exchange (BSX) as insurance related securities.
It’s typical for private cat bonds like this to feature peak property catastrophe perils, most commonly from the United States.
They tend to either be bilateral arrangements, where a cedent and investor opt to use a private ILS structure to securitise the risks involved in a reinsurance transaction into an investable form. Or sometimes syndicated, where a cedent wants to trade with multiple investors or ILS funds in a securitized format.
Private cat bond deals can also sometimes involve ILS fund to ILS fund transactions, which usually take the form of an industry loss warranty (ILW).
Structures like the Artex SAC vehicle provide an efficient way for cedants and investors to achieve risk transfer and full securitisation of the resulting investment into a form that suits a more liquid or catastrophe bond focused ILS fund mandate.