Eclipse Re Ltd. (Series 2020-02A)

This is the second private catastrophe bond, or cat bond lite, to be issued using the Horseshoe managed Eclipse Re Ltd. special purpose vehicle in 2020.

This second private cat bond of 2020 from Eclipse Re saw $20 million of notes issued, which were placed with qualified institutional investors or a group of investors.

This could be a deal for a single ILS fund manager, such as Fermat, transforming risks underwritten into liquid catastrophe bond note form for an investment fund strategy, given these private deals are often bilaterally arranged.

Eclipse Re provides a platform for the market where insurance-linked securities (ILS) funds or investors can engage in reinsurance and retrocession contracts more directly with ceding companies, but still benefit from a risk transfer arrangement that is transformed and securitized into private cat bond form.

The proceeds from the sale of these notes will have been used as collateral to underpin related reinsurance or retrocession contracts.

This $20 million Eclipse Re Ltd. (Series 2020-02A) transaction saw special purpose Bermudian insurer Eclipse Re Ltd. issuing one tranche of Series 2020-02A notes from its segregated account SAC EC0027, with the notes having a due date of April 1st 2021.

As a result, we assume the issued private cat bond notes represent a one-year reinsurance or retrocession arrangement, likely entered into at the April renewal season. Hence they could feature Japanese property catastrophe risks, which feature heavily in April, but they could also be from a U.S. national account as some of those also renew.

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

Leading ILS and reinsurance market service provider and facilitator Horseshoe Group is the lead for these Eclipse Re transactions, given it manages the special purpose vehicle as part of its offering to clients.