Seaside Re (Series 2018-2) – Full details:
This is the third Seaside Re transaction to come to light in December 2017, as reinsurance firm Hannover Re continues to act as an ILS transformer and facilitator using its Kaith Re Ltd. segregated accounts vehicle.
This $50 million Seaside Re (Series 2018-2) private catastrophe bond, or cat bond lite, transaction, has been issued by Kaith Re Ltd., helping an investor to access U.S. property catastrophe risks in a securitised, cat bond note form.
For this 2018-2 issuance, Kaith Re Ltd. acted on behalf of its segregated account named Seaside Re to issue a single $50 million tranche of Series 2018-2 private cat bond notes for the investor(s). The notes have been issued pursuant to the Seaside Re bond program, which was originally established and listed with a 2017-1 transaction.
The single $50 million tranche of Series 2018-2 notes issued by segregated account Seaside Re are due January 15th 2019, so represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most common with private cat bonds. This is the same due-date as the Seaside Re 2018-1 and 2018-2 transactions which were completed and listed earlier in December.
The Seaside Re bond program provides investors with access to U.S. property catastrophe risks, but further details of the exact nature of this transaction and the reinsurance or retrocessional coverage it provides are unavailable at this time. It is possible that these Seaside Re transactions are a way for investors to participate in Hannover Re’s own retro program.
This $50 million tranche of Series 2018-2 notes issued by Seaside Re have been admitted for listing on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities and have been placed with qualified ILS investors.
This is the sixth tranche of notes issued through the Seaside Re program from Hannover Re’s Kaith Re reinsurance transformer vehicle.
Update – March 2019:
This private cat bond has had its maturity extended to June 30th 2019, presumably to allow for development of qualifying catastrophe losses from during the risk period. As it covered U.S. property catastrophe risks we assume this could be the hurricanes and perhaps California wildfires.