Eclipse Re Ltd. (Series 2019-04A)

The Eclipse Re Ltd. private insurance-linked securities (ILS) and catastrophe bond platform has issued another transaction, now its fourth issuance of 2019.

We believe that this specific issuance is a securitization of ILS investment manager Fermat Capital Management’s participation in the 2019 mid-year reinsurance renewal of Florida’s Citizens Property Insurance Corporation.

The size of the notes issued in this 2019-04A deal by Eclipse Re Ltd. (precisely $24,999,975) is exactly the same as the slice of Florida Citizens 2019 aggregate reinsurance layer that Fermat Capital underwrote at the renewal.

Details seen by Artemis show that when Fermat Capital Management took that slice of Florida Citizens program, its participation was through Eclipse Re.

As a result we also assume that the risks covered are Florida named storm risk, on an annual aggregate basis, given the layer of Citizens program the notes appear to relate to.

In this latest issuance to come to light, Eclipse Re Ltd. issued a single just slightly smaller than $25 million tranche of private catastrophe bond notes, which in this case appear to have been issued for ILS funds under the management of Fermat and the proceeds used as the collateral to underpin the linked aggregate reinsurance arrangement with Florida Citizens.

The $25 million transaction saw special purpose Bermudian insurer Eclipse Re Ltd. issuing one tranche of Series 2019-04A notes from its segregated account SAC EC0022, with the notes having a due date of June 1st 2020.

So, in this case we assume these notes represent a one-year aggregate reinsurance contract underwritten at the mid-year renewals between Fermat and Florida Citizens, likely featuring Florida wind risk.

The single tranche of almost $25 million notes have been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance related securities.

Horseshoe Group acted as the listing sponsor for the notes, through its Horseshoe Corporate Services Limited entity.