Tomoni Re Pte Ltd. (Series 2022-1)

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Tomoni Re Pte Ltd. (Series 2022-1) – At a glance:

  • Issuer: Tomoni Re Pte Ltd.
  • Cedent / sponsor: Mitsui Sumitomo Insurance Co. Ltd., Aioi Nissay Dowa Insurance Co., Ltd.
  • Placement / structuring agent/s: Aon Securities is sole structuring agent and bookrunner
  • Risk modelling / calculation agents etc: AIR Worldwide
  • Risks / perils covered: Japan typhoon, Japan flood
  • Size: $220m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Mar 2022

Tomoni Re Pte Ltd. (Series 2022-1) – Full details:

This is a new catastrophe bond issuance that has been launched to benefit two of Japanese insurance carriers owned by MS&AD Insurance Group Holdings.

The ultimate beneficiaries of the reinsurance that the Tomoni Re 2022 catastrophe bond will provide are set to be Mitsui Sumitomo Insurance Co. Ltd. and Aioi Nissay Dowa Insurance Co., Ltd., both of which have been sponsors or beneficiaries of catastrophe bond backed reinsurance protection before.

Tomoni Re Pte Ltd. is a newly registered Singapore based special purpose reinsurance vehicle.

Tomoni Re Pte Ltd. will issue two series of notes, a Series 2022-1 and a Series 2022-2 issuance, with each Series also having two tranches sitting beneath.

The overall size of the issuance is targeted at $240 million or more, with the protection set to be afforded on an indemnity trigger basis and across a roughly four-year term to early April 2026, we’re told.

The coverage from all four tranches of notes will be against certain losses caused by typhoons and floods in Japan.

All four tranches of notes are currently sized at $60 million each, for the $240 million total.

A Series 2022-1 Class A-1 tranche of notes will provide Mitsui Sumitomo with per-occurrence reinsurance protection, have an initial expected loss of 0.38% and we understand are being offered to cat bond investors with price guidance in a range from 1.9% to 2%.

A Series 2022-1 Class B-1 tranche of notes will provide Aioi Nissay Dowa with per-occurrence protection, have an initial expected loss of 1.37% and are being offered to investors with coupon guidance of 2.5% to 2.75%.

A Series 2022-2 Class A-2 tranche of notes will provide Mitsui Sumitomo with annual aggregate reinsurance protection, have an initial expected loss of 0.55% and are being offered with price guidance of 2.25% to 2.75%.

Finally, a Series 2022-2 Class B-2 tranche of notes will provide Aioi Nissay Dowa with protection on a two-year aggregate basis, have an initial two-year expected loss of 1.87%, annualised at 0.93%, and are being offered with coupon guidance of 2.75% to 3.25%, we’re told.

Update 1:

We’re told the two aggregate tranches, the Series 2022-2 classes of notes, have now been dropped from this issuance, leaving just the Series 2022-1 tranches that will provide per-occurrence reinsurance protection.

The Series 2022-1 Class A-1 tranche of notes is now targeted at $100 million to $125 million in size, with price guidance slightly tighter at 1.95% to 2%.

The Series 2022-1 Class B-1 notes are now targeted at $90 million to $120 million in size, with price guidance again a little tighter at 2.65% to 2.75%.

We suspect pricing was the reason for the aggregate layers being dropped, as they were originally marketed at quite tight spreads.

Update 2:

At pricing, the Class A-1 tranche of notes will provide Mitsui Sumitomo with $100 million of per-occurrence Japanese typhoon and flood reinsurance, with pricing now fixed at the upper-end of 2%.

The Class B-1 notes will provide Aioi Nissay Dowa with $120 million of per-occurrence reinsurance protection against Japanese typhoons and floods, while the pricing for the notes has now been finalised at the top-end of guidance, at 2.75%.

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