Eclipse Re Ltd. (Series 2019-07A)

This is the seventh private catastrophe bond or cat bond lite transaction to be issued using the Eclipse Re Ltd. special purpose vehicle in 2019, as the use of this transformer and private ILS platform continues to accelerate this year.

The Horseshoe Group managed private catastrophe bond and insurance-linked securities (ILS) issuance vehicle Eclipse Re Ltd. has completed its seventh transaction of 2019, taking the total risk capital issued using the transformer to just shy of $300 million for the year so far.

For its seventh transaction of 2019, Eclipse Re Ltd. has issued a single just slightly under $20 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 used as the collateral to underpin related reinsurance or retrocession contracts.

The $20 million Eclipse Re Ltd. (Series 2019-07A) transaction saw special purpose Bermudian insurer Eclipse Re Ltd. issuing one tranche of Series 2019-02A notes from its segregated account SAC EC0025, with the notes having a due date of October 1st 2020.

As a result, it’s assumed the issued private cat bond notes represent a one-year reinsurance or retrocession arrangement.

The single $20 million tranche of notes has been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance related securities.

Platforms like Eclipse Re are typically used by ILS fund managers who want an investable asset for their cat bond fund strategies, rather than a pure collateralised reinsurance arrangement.

By channeling a reinsurance or retro deal through a transformer and securitisation platform like Eclipse Re, investable notes suited to more liquid ILS fund strategies can be achieved.

ILS and reinsurance market facilitator and service provider Horseshoe Group is the lead on these Eclipse Re transactions, given it manages the vehicle and offers it to clients.