Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

$10m insurance-linked notes from first Tullett Prebon deal list on BSX


Following the first successful catastrophe risk transaction to use the Tullett Prebon owned Insurance Linked Notes (ILN) platform, $10 million of insurance-linked securities (ILS) have now been listed on the Bermuda Stock Exchange (BSX).

HandshakeThe first issuance and settlement of catastrophe risk linked notes through the ILN platform was recently completed and involved at least one ILS fund manager, in LGT ILS Partners.

The arrangement was an industry loss based deal, likely retrocessional reinsurance in nature and used a trigger from PCS, which is now acting as the reporting agent for the transaction.

LGT ILS Partners, the specialist ILS fund management unit of global asset manager LGT, was revealed as one of the parties involved in this first ILN deal.

The transaction likely featured an ILW risk transfer between ILS funds (with LGT one party), or a retrocessional reinsurance arrangement for a specific reinsurer counterparty.

The size of the deal was not revealed in the announcement last week, but it now appears that it was a $10 million transaction.

Tullett Prebon has a dedicated insurance-linked securities (ILS) vehicle to support any deal-flow on its ILN platform, having registered a Bermuda based special purpose vehicle, a segregated accounts structure, named ILN SAC Ltd.

Two tranches of notes have been issued by ILN SAC Ltd. and both have been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance related securities.

ILN SAC Ltd. has issued a $9.525 million tranche of Class PS notes and a $475,000 tranche of Class PB notes, which will correspond to the buyer and seller protection notes that the ILN platform produces for each of its transactions (PS being seller notes notes, PB being buyer).

Both tranches, so the full $10 million of notes, are due for maturity on September 18th 2020, suggesting the underlying industry loss based reinsurance or retro protection is for roughly one year.

We’ve added this first ILN transaction from Tullett Prebon’s platform to our catastrophe bond and related ILS Deal Directory, as we consider these a tradable ILS deal akin to a cat bond, using the naming convention ILN SAC Ltd. Series 2019-1 given it is the first transaction issued using the platform.

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