Swiss Re Insurance-Linked Fund Management

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$60m Resilience Re 1812A zero coupon cat bond issued


A new private catastrophe bond has been issued through the Willis Towers Watson owned platform Resilience Re Ltd., in the form of a $60 million Resilience Re Ltd. (Series 1812A) zero coupon arrangement that will be providing an unknown sponsor with collateralized reinsurance protection.

Resilience Re Ltd. is the private cat bond, or cat bond lite, issuance platform that set up by the Willis Towers Watson Securities team as a way to help ceding companies gain access to capital markets backed reinsurance capacity in an efficient manner.

The platform has been well used so far, with now eight Resilience Re transactions listed in our catastrophe bond Deal Directory since the first issuance in late 2015.

This new private Resilience Re cat bond deal was actually issued in February but the listing has only just come to light on the Bermuda Stock Exchange (BSX).

A single $60 million Series 1812A tranche of zero coupon notes has been issued by Resilience Re, likely providing a sponsor with fully collateralized property catastrophe reinsurance coverage.

The $60 million of zero coupon notes are due for maturity in October 2019, so this deal could cover a year and a half or almost two wind seasons (if they cover named storms) for a sponsor, perhaps.

The notes have been privately placed with qualified investors and then listed on the BSX as Section V – Insurance Related Securities.

Details are scant, as ever, with this latest private Resilience Re cat bond, but we assume the sponsor is benefitting from efficient access to collateralized reinsurance cover from the capital markets for losses from certain property catastrophe reinsurance exposures.

Willis Towers Watson Securities will have provided the service roles of lead structuring agent and bookrunner for this private cat bond, enabling the sponsor and investors to transact, transforming a reinsurance arrangement into a securitised cat bond note with secondary liquidity also a possibility.

The discounted zero coupon note structure used in this and many other similar transactions has benefits for both sponsors and investors. The sponsor essentially funds the reinsurance premium up front, providing the investor with a form of leverage, which can even result in keener pricing and enhanced transactional efficiency.

You can read all about this $60 million Resilience Re Ltd. (Series 1812A) private cat bond and every other catastrophe bond, private or public 144A, transaction in the Artemis Deal Directory.

It will not be fully included in all of our catastrophe bond and ILS market statistics due to the lack of available information.

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