With the successful completion of the latest catastrophe bond to be issued, AXA’s Calypso Capital II Ltd. European windstorm cat bond, the total volume of catastrophe bond risk capital issued so far in 2013 is now officially $6.24 billion, according to the Artemis Deal Directory.
The €350m (approx. $476m) Calypso Capital II catastrophe bond was settled and issued today, bringing the fully-collateralized, per-occurrence European windstorm reinsurance protection from the capital markets into effect for beneficiary AXA Global P&C. The issued notes received a final ratings from Standard & Poor’s this morning.
Standard & Poor’s assigned its ‘BB- (sf)’ rating to the class A notes and ‘B+ (sf)’ rating to the class B notes issued by Calypso Capital II Ltd. and sponsored by AXA Global P&C, the risk transfer counterparty.
The class A and B notes cover on a per-occurrence and industry loss basis European windstorm events that occur in Belgium, Denmark, France (excluding overseas territories), Germany, Ireland, Luxemburg, The Netherlands, Norway, Switzerland, Sweden and the UK between Jan 1st 2014 and Dec 31st 2016 or 2017, respectively.
This officially brings 2013 catastrophe bond and insurance-linked security (ILS) issuance to $6.24 billion, based on transactions included in our Deal Directory. That number is now set to grow even further with the launch of a new cat bond, Catlin’s Galileo Re Ltd., set to take issuance to at least $6.414 billion by the end of October.
2013 catastrophe bond and ILS issuance has been well-distributed throughout the year, with many more new deals coming to market during the hurricane season than has been typical of recent years.
The chart below shows 2013 catastrophe bond issuance by month and includes the new Galileo Re deal in October. You can see that the only month with no deals actually completing, although some were marketed during the month, was February.
Including the latest Galileo Re Ltd. cat bond, 2013 issuance is now higher than we recorded in 2012. In 2012, we recorded just under $6.4 billion of total issuance, 2013 is on track to beat that before the end of October as Galileo Re is slated to complete this month which will take 2013 catastrophe bond issuance to at least $6.414 billion even if Galileo Re doesn’t increase in size.
The chart below shows catastrophe bond issuance by year, including the Galileo Re deal in 2013.
As we wrote last week, the size of the outstanding catastrophe bond market reached an all time high of $19.012 billion in September when Atlas IX Capital closed. Now with the completion of Calypso Capital II that number has officially hit $19.488 billion and it will rise further when Galileo Re completes, to at least $19.663 billion, depending on whether Galileo Re upsizes.
A catastrophe bond market of $20 billion plus in size is easily possible by the end of 2013 now, with maturities of around $650m due by year-end that number should easily be beaten and even $21 billion of catastrophe bond and ILS risk capital outstanding could be within reach.