Dodeka XXIII

Zurich headquartered insurance and reinsurance linked investment manager Twelve Capital has now issued its 25th private catastrophe bond deal in the Dodeka series of transactions.

The series of private cat bond or insurance-linked securities (ILS) provide Twelve Capital a mechanism to securitise underlying reinsurance or retrocessional risks into securitised cat bond form, to suit its more liquid ILS funds or private investor ILS mandates.

This latest Dodeka XXIII transaction saw $9.33 million of notes issued and then listed on the Bermuda Stock Exchange (BSX), which further enhances the liquidity of the resulting notes for investors or specific mandates.

The transformer and issuing vehicle is the Artex SAC Limited vehicle, which is domiciled in Bermuda and managed by Artex and has been involved in every Dodeka private cat bond arrangement to-date.

The vehicle acted in respect of a Segregated Account named Dodeka XXII to issue the $9.33 million of ILS notes.

The Dodeka XXIII private cat bond appears to only cover a six month term, with maturity of the notes due January 20th 2020.

So, while full details on these transactions are never available, given the private nature of the Dodeka ILS deals, we can make some assumptions.

We assume that these transactions have likely featured a transformed industry-loss warranty (ILW) providing reinsurance or retrocession to an unamed ceding company, given the ease with which they can be transformed, most likely securitizing U.S. property catastrophe risks.

In this case believe the transaction likely covers U.S. wind related risks, so tropical storms and hurricanes, given the risk period runs from June 1st to the end of the year, so covering one full hurricane season.