$187m Resilience Re 1712 private cat bond issued on Willis platform

A new $187 million, three tranche, private catastrophe bond issuance has been completed in Resilience Re Ltd. (Series 1712) using the platform owned by insurance, reinsurance and capital markets broker and advisory Willis Towers Watson.

Willis Capital Markets & Advisory (WCMA), the investment banking, catastrophe bond and insurance-linked securities (ILS) expert unit of the broker, launched its Resilience Re Ltd. private cat bond platform to offer clients a way to access capital markets capacity with lower friction.

This $187 million Resilience Re Ltd. (Series 1712) issuance is the fourth on the Willis private cat bond platform we’ve seen and listed in our Deal Directory, but its size makes it the largest of the transactions to date by a margin (an April 2016 1642B deal was the previous largest at $85 million).

Three tranches of notes have been issued in this Series 1712 deal from Resilience Re. The deal consists of a $101 million Series 1712A tranche, a $35.999,990 million Series 1712B tranche and a $49.999,890 million Series 1712C tranche, so totaling just slightly under $187 million at $186.999,880 million.

All three tranches have been structured as principal-at-risk notes, with the 1712A and 1712B both due on January 8th 2019. That suggests a possible two year term for two tranches of this private cat bond, which is a little unusual as the majority tend to represent a single annual reinsurance contract. The 1712C tranche is due on January 8th 2018, so likely represents an annual contract.

All three tranches of Resilience Re 1712 cat bond notes have been admitted for listing on the Bermuda Stock Exchange (BSX) as Section V Insurance Related Securities and the notes have been placed with qualified investors.

As usual for a private cat bond, we assume that the Resilience Re 1712 notes cover property catastrophe risks, given the dominance of those perils in the ILS market, but details of the exact nature of this transaction are unavailable at this time.

In January 2016 the Resilience Re platform was first used to transform a collateralised reinsurance layer from the California Earthquake Authority’s (CEA) reinsurance renewal, resulting in a $57m Resilience Re Ltd. (Series 15121A).

Then in April 2016 a larger $85m Resilience Re Ltd. (Series 1642B) transaction was completed, which again transformed a collateralised reinsurance contract as part of a CEA renewal.

A $34m Resilience Re Ltd. (Series 1661A) transaction was then completed in June 2016, however we’re not sure on the sponsor or details of that issuance.

This latest deal shows that traction is picking up for these private catastrophe bond issuance platform, as investors and cedents see the benefit in being able to access reinsurance risks in cat bond form in a more efficient, lower friction manner.

Willis Capital Markets & Advisory will have played the joint roles of structuring agent and bookrunner for this private cat bond deal, enabling the ceding company and investor to transform a reinsurance arrangement into a securitised cat bond note with secondary liquidity possible.

The Resilience Re platform enables sponsors to access ILS investors, and ILS funds or investors to invest in reinsurance or industry loss warranty (ILW) contracts in a securitised and liquid form, so meeting many investment mandates.

We will update you should any further information about the sponsor or underlying perils featured in this latest and largest Resilience Re deal become available.

You can read all about this Resilience Re Ltd. (Series 1712) private cat bond and every other catastrophe bond transaction in the Artemis Deal Directory. It will not be fully included in all of our catastrophe bond and ILS market statistics due to a lack of available information.

Join Artemis in New York on February 3rd 2017 for ILS NYC.