Swiss Re Insurance-Linked Fund Management

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Market Re Ltd. (Series 2016-2)

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Market Re Ltd. (Series 2016-2) – At a glance:

  • Issuer: Market Re Ltd. (Series 2016-2)
  • Cedent / sponsor: Unknown
  • Placement / structuring agent/s: Jardine Lloyd Thompson Capital Markets are structuring agent and bookrunner
  • Risk modelling / calculation agents etc: ?
  • Risks / perils covered: Florida named storms
  • Size: $78.7m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Jun 2016

Market Re Ltd. (Series 2016-2) – Full details:

The Jardine Lloyd Thompson Capital Markets (JLTCM) team has successfully completed its largest Market Re privately placed catastrophe bond to date, with the announcement of a $78.7m Market Re Ltd. (Series 2016-2) deal for a repeat sponsor.

The $78.7m of Series 2016-2 notes issued by JLTCM’s (the capital markets unit of reinsurance broker JLT Re) private cat bond issuance platform Market Re are exposed to Florida named storm risks and will provide the unnamed sponsor, which has used the Market Re platform before, with a source of collateralized reinsurance protection designed as a replacement layer for some of its Florida Hurricane Catastrophe Fund (FHCF) coverage.

The $78.7m of notes will provide the sponsor with a one-year source of fully collateralized, indemnity based, catastrophe reinsurance coverage for its Florida book of business. The single class of notes was privately placed with ILS investors and will sit alongside the ceding companies FHCF coverage.

This Market Re 2016-2 transaction has been structured as a zero coupon, one year note. The $78.7m of Class A notes issued represent $83,991,462 of limit, which equates to an implied Net rate-on-line against this limit of around 6.3%.

As the largest Market Re issuance to date, this deal shows the ceding companies increasing interest in leveraging insurance-linked investor capital and the catastrophe bond structure in a more efficient manner.

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