The Jardine Lloyd Thompson Capital Markets (JLTCM) team has announced completion of its second Market Re platform privately placed catastrophe bond transaction in a week, with the completion of a $25m Market Re Ltd. (Series 2016-4) deal.
Coming hot on the heels of the JLTCM team’s largest Market Re cat bond so far, last weeks $78.7m Market Re Ltd. (Series 2016-2) deal, this $25m, smaller transaction, demonstrates that the private cat bond issuance platforms can still compete on efficiency with other collateralised reinsurance options.
JLTCM, the capital market, insurance-linked securities (ILS) and investment banking affiliate of global reinsurance broker JLT Re, has announced the placement of the $25m of ILS notes in a Series 2016-4 tranche issued by its Market Re Ltd. special purpose insurance vehicle.
The transaction will provide an unnamed ceding insurer with a one-year source of fully-collateralized catastrophe reinsurance protection, on an indemnity trigger basis to cover its Florida book of business.
The single tranche of notes will act as a second-event cover within the ceding companies catastrophe reinsurance tower, sitting at a remote attachment level. The transaction is again from a repeat user of the Market Re platform, as the one-year transactions from 2015 now get renewed.
“We continue to see Market Re enable clients to transfer different risk/return portions of their reinsurance towers to capital market players,” commented Michael Popkin, Managing Director and Co-Head of Insurance-Linked Securities at JLTCM.
“With the increasing success of Market Re as a leading private placement vehicle, we expect corporate clients to access capital markets capacity, especially as JLT Specialty USA continues to grow,” added Rick Miller, Managing Director and Co-Head of Insurance-Linked Securities at JLTCM.
Privately placed cat bonds (or cat bond lites) continue to play an important role for both their sponsors and for ILS investors or fund managers in search of securitised product. As an efficient way to reach the capital markets to source fully collateralised protection, private cat bond vehicles remain an important tool for reinsurance or retrocession buyers.