Mangrove Risk Solutions Bermuda Ltd. (Series 2025-A)

This private catastrophe bond is the sixth issuance of a cat bond lite that we’ve seen come out of the Mangrove Risk Solutions Bermuda Ltd. platform that is operated by Marsh McLennan and reinsurance broker Guy Carpenter.

This latest private cat bond, or series of privately placed insurance-linked securities (ILS) issued by Mangrove Risk Solutions Bermuda Ltd. is a Series 2025-A arrangement.

Mangrove Risk Solutions Bermuda Ltd. has issued $102.5 million of discounted zero-coupon participating notes, on behalf of one of its segregated accounts named 2025-A.

At $102.5 million, this is the largest issuance under Mangrove Risk Solutions that we have seen to-date.

The notes have been sold to qualified investors and the collateral raised is expected to underpin a reinsurance or retrocession agreement that the segregated cell and trust are subject to.

The $102.5 million of Series 2025-A private cat bond notes that have been issued by the Mangrove vehicle are due for maturity on May 15th 2026, we understand. The notes were privately placed with qualified investors.

As is typical with these private catastrophe bond deals, it’s not clear to us if this is a reinsurance or retrocession deal from the mid-year renewals perhaps, that has taken time to be transformed and securitized, or a freshly arranged reinsurance or retro deal with a term of less than one year.

As with every private ILS or cat bond deal, until we learn more details we assume these cover property catastrophe reinsurance or retrocession risks.

With private cat bonds, in certain cases the risks will have been transformed to enable an ILS fund or investor to source an asset that meets a catastrophe bond mandate, so a transformation from a traditional reinsurance or retro contract.

Or, in other cases, they can see an unknown cedant accessing the capital markets for protection from ILS investors in a more efficient manner than undertaking a full 144A cat bond issuance process.

Private ILS or cat bond lite arrangements usually fit into one of a number of use-cases. Either as a straight collateralised reinsurance or retro cover for a carrier, that has been transformed and securitised, to be assumed by a single ILS fund or investor, or for a small group of funds/investors, or, ILS fund-to-fund transactions (hedging), or the transformation of a specific risk transfer arrangement, such as an industry-loss warranty (ILW).

Guy Carpenter’s specialist capital markets and investment banking unit GC Securities is assumed to have structured the transaction and acted as a bookrunner or placement firm for this Mangrove Risk Solutions private ILS transaction. While Marsh Management Services will have acted as the insurance manager for the structure itself, as has been seen with all the previous issuances under the Mangrove and former Isosceles name.

Being a Bermuda insurance-linked securities (ILS) structure, the private cat bond notes have been listed on the Bermuda Stock Exchange (BSX), which is again an enhancement for liquidity, while Appleby has acted as the listing sponsor for this purpose.