Eclipse Re Ltd. (Series 2019-06A) – Full details:
This is the sixth private catastrophe bond or cat bond lite transaction issued that uses the Eclipse Re Ltd. vehicle in 2019, reflecting the continuing increase in use of this transformer and private ILS platform.
The Horseshoe Group managed private catastrophe bond and insurance-linked securities (ILS) issuance vehicle Eclipse Re Ltd. has completed its sixth transaction of 2019, taking the total risk capital issued using the transformer to just shy of $280 million for the year so far.
For this sixth deal of 2019, Eclipse Re Ltd. has issued a single $48 million tranche of private catastrophe bond notes, which have been sold to investors or ILS funds and the proceeds from the sale of the notes will have been used as the collateral to underpin linked reinsurance or retrocession contracts.
The $48 million Eclipse Re Ltd. (Series 2019-06A) transaction saw special purpose Bermudian insurer Eclipse Re Ltd. issuing one tranche of Series 2019-02A notes from its segregated account SAC EC0024, with the notes having a due date of July 1st 2020.
We assume the issued private cat bond notes represent a one-year reinsurance or retrocession, likely entered into at the mid-year renewals, probably featuring U.S. wind, earthquake or other U.S. natural perils risks, given the contract running to the start of June 2020.
The single tranche of notes has been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance related securities.
Typically, platforms like Eclipse Re are used by ILS fund managers who want an investable asset for cat bond strategies, rather than a pure collateralised reinsurance arrangement. By channeling a reinsurance or retro deal through a platform like Eclipse Re investable notes suited to more liquid ILS fund strategies can be achieved.
ILS and reinsurance market facilitator Horseshoe Group is the lead facilitator on these Eclipse Re transactions.