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Kane SAC Limited (Series 2013-1)

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Kane SAC Limited (Series 2013-1) – At a glance:

  • Issuer: Kane SAC Limited (Series 2013-1)
  • Cedent / sponsor: Unknown
  • Placement / structuring agent/s: ?
  • Risk modelling / calculation agents etc: ?
  • Risks / perils covered: Texas hurricane
  • Size: $9.524m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Aug 2013

Kane SAC Limited (Series 2013-1) – Full details:

Kane, the global independent insurance manager, has launched a private catastrophe bond issuance platform and a first series of notes has been issued. The private catastrophe bond notes have been issued through the Kane SAC Limited Note Program, a platform Kane has established to assist private ILS sponsors.

Kane SAC Limited (Kane SAC), a subsidiary of Kane, today announced the issuance of US$9,523,770 Series 1-2013 Notes and the launch of the Kane SAC Limited Note Program, its new independent private catastrophe bond platform.

The first issuance from the platform of $9,523,770 Series 1-2013 have been listed on the Bermuda Stock Exchange as well, making this the first issuance of ILS notes by a segregated account company to be listed on the BSX.

Kane SAC is a Bermuda exempted company registered as a Class 3 insurer and as a Class C insurer under the Insurance Act 1978 (as amended) and as a segregated accounts company registered under the Segregated Accounts Companies Act 2000 (as amended).

Kane told us that the $9,523,770 Series 1-2013 notes issued by Kane SAC Limited are exposed to U.S. North American wind (hurricane risks). The notes have a one year risk period, being due on the 5th of July 2014 but extendable until 1st August 2019 (presumably for loss development). The notes use an indemnity trigger based on the incurred losses under the ceded portfolio of risk that is included in the deal.

The notes which have been listed on the Bermuda Stock Exchange feature the Texas Windstorm Insurance Association (TWIA) as the ceding insurer, meaning that the U.S. wind risk will be Texas-based from TWIA’s portfolio of risk, likely from the coastal region of Texas where hurricane impacts can be most severe.

The notes have been structured as a zero coupon bond, which suggests that this transaction has been undertaken to suit an investor or collateralized source of capacity, which participated in TWIA’s recent mid-year reinsurance renewals but had a mandate to invest in insurance-linked securities with secondary liquidity, rather than just a collateralized reinsurance contract.

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