Mangrove Risk Solutions Bermuda Ltd. (Series 2025-D2)

This is the fifth private catastrophe bond issuance, or cat bond lite, we’ve seen come from 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 insurance-linked securities (ILS) issued by Mangrove Risk Solutions Bermuda Ltd. is a Series 2025-D2 arrangement.

Mangrove Risk Solutions Bermuda Ltd. has issued $6.25 million of discounted zero-coupon participating notes, on behalf of one of its segregated accounts named 2025-D2.

The notes have been sold to investors and the resulting collateral will underpin a reinsurance or retrocession agreement that the segregated cell and trust are subject to.

The $6.25 million of Series 2025-D2 private cat bond notes that Mangrove has issued are due for maturity on April 10th 2026, we understand. The notes have been privately placed with qualified investors.

It’s not clear if this is a reinsurance or retrocession deal from the April renewals perhaps, that has taken time to be transformed and securitized, or a fresh deal with a less than one year term.

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 some cases the risks 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, they can see a cedant accessing capital market investors for protection in a more efficient manner than undertaking a full 144A cat bond issuance process.

Private ILS or cat bond lite arrangements normally 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 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 will 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 structure, the notes have been listed on the Bermuda Stock Exchange (BSX), which is again an enhancement for liquidity and Appleby acted as the listing sponsor.