Isosceles Insurance Ltd. (Series 2020-C1) – Full details:
This $25 million Isosceles Insurance Ltd. (Series 2020-C1) transaction is the second deal to come to light from the issuance platform.
For this latest transaction from the platform, Isosceles Insurance Limited has issued a single $25 million tranche of Series 2020-C1 ILS notes, which have been privately placed with qualified investors.
The $25 million of Series 2020-C1 notes issued by Isosceles Insurance Ltd. for this transaction are structured as discounted zero coupon notes, typical of a private ILS transformation of a collateralised reinsurance or retrocession contract, converting it into something more liquid and investable as a security.
The notes have a maturity date of August 5th 2021, suggesting the underlying contract likely runs for about a year.
As a result, we assume this issuance may be linked to the mid-year renewals and likely features property catastrophe reinsurance or retrocession risks that have been transformed in order to provide an ILS fund or investor with an asset that meets a catastrophe bond mandate, while offering greater options in terms of secondary liquidity.
These private ILS or cat bond lite arrangements typically either feature risks from a primary insurance carrier being subject to a collateralised reinsurance agreement that is then transformed and securitised, to either be assumed by a single ILS fund or investor, or a small group of funds/investors.
Another use-case might be ILS fund-to-fund transactions, retrocession placement transformation, or the transformation of a specific arrangement such as an industry-loss warranty (ILW).
It’s not possible to understand if this was a bilateral agreement featuring a single ILS fund or investor, or a privately placed transaction that was marketed to a number of investors and funds.
It’s assumed that reinsurance broker Guy Carpenter’s capital markets unit GC Securities has assisted with structuring and acting as a bookrunner, where needed, for this Isosceles Insurance Ltd. private ILS transaction. While also assumed that Marsh Management Services will have acted as the insurance manager.
While this is only the second transaction from the Isosceles Re platform that we’ve seen, there are likely to be others more privately placed that we don’t get to hear of.
In June the first private ILS deal from the platform came to light, a $16.5 million Isosceles Insurance Ltd. (Series 2020-A1) arrangement.