Another private catastrophe bond, or cat bond lite, has been issued in time for the upcoming reinsurance renewal, the first from the Artex Risk Solutions owned segregated account reinsurance transformer platform in a year, a $50.22 million Artex SAC Limited – Series HX Notes transaction.
This private cat bond transaction has been arranged and issued in Bermuda using the Artex SAC Limited transformer vehicle and its ILS Note Program II. The resulting notes were listed on the Bermuda Stock Exchange (BSX).
Details of the underlying reinsurance or retrocession transaction are limited for this latest private cat bond, as is typical with these deals from the Artex Risk Solutions issuance platform, as it will have been privately arranged and issued for an unknown sponsoring cedant.
In this transaction a $50.22 million Series HX tranche of notes has been issued by the Artex SAC Limited vehicle, using the ILS Note Program II and a HX Notes segregated account. The notes have been placed with qualified investors and listed on the Bermuda Stock Exchange (BSX) as insurance related securities, with a due date of April 7th 2020.
These private cat bond transactions from the Artex platform typically involve peak property catastrophe reinsurance perils (usually from the U.S.), with a cedant and investor opting to use a private ILS structure to securitise the underlying risks into investable form, and usually feature triggers based either on an industry loss or an indemnity structure basis.
These aarrangements often involve an established insurance-linked securities (ILS) fund manager, or an individual or club group of investors, seeking to access risk from a transformed collateralised reinsurance contract or industry loss warranty (ILW) in a securitised cat bond format, meeting investment fund mandates.
The Artex SAC Limited vehicle and its ILS note programs help investors and fund managers to access reinsurance linked risks in securitised, cat bond-like form more cheaply and from smaller deals than are typically seen in the main 144A cat bond market.