Seaside Re (Series 2020-12) – Full details:
Another new private cat bond deal has been issued using reinsurance firm Hannover Re’s Kaith Re Ltd. segregated accounts vehicle.
Hannover Re continues to act as ILS market facilitator by helping ceding companies access the capital markets through securitised transactions structured in cat bond lite form, also helping investors to access to its own portfolio of reinsurance risks in this way as well.
For this new Seaside Re 2020-12 private cat bond, Hannover Re’s transformer vehicle Kaith Re Ltd. acted on behalf of its segregated account named Seaside Re to issue a $5.75 million tranche of Series 2020-11 notes.
The proceeds of the sale of these notes to ILS investors will have been used as collateral to support an underlying reinsurance or retrocession agreement for the ceding re/insurer and ultimate beneficiaries of the protection.
The $5.75 million Series 2020-12 tranche of notes issued by Seaside Re are exposed to certain U.S. property catastrophe losses and have a due date of January 6th 2021, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most commonly seen with private cat bonds.
The due-date is the same as a $3.75 million Series 2020-11 tranche of notes that came to market at the same time.
Hannover Re’s Seaside Re private cat bond transactions provide ILS investors with a mechanism to access certain U.S. property catastrophe risks in cat bond lite securitised form, with the potential for secondary liquidity and the ability to meet certain of their investor and fund mandates.
As with all private ILS and cat bond lite arrangements, the full details of the transaction and underlying reinsurance or retrocessional coverage they provide are not available to us.