Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

$85m private Resilience Re cat bond completed on Willis platform


An $85m private catastrophe bond, or cat bond lite, transaction has been issued using the platform owned by broker Willis Towers Watson, with the completion and listing of a Resilience Re Ltd. (Series 1642B) deal.

The Resilience Re Ltd. private cat bond platform was launched by Willis Capital Markets & Advisory (WCMA), the catastrophe bond, insurance-linked securities (ILS), M&A and investment banking unit of global insurance and reinsurance broker Willis, to provide clients with a lower-friction option to access the capital markets.

This is the second transaction from the platform that we have received some information on, we cannot be certain whether it has been used for other deals as well. Back in January the California Earthquake Authority (CEA) used the platform to transform a collateralised reinsurance signing on its renewal, with the $57m Resilience Re Ltd. (Series 15121A).

Now a larger, second transaction has come to light, with the listing of an $85m Resilience Re Ltd. (Series 1642B) tranche of notes on the Bermuda Stock Exchange (BSX).

The $85m of notes issued by Resilience Re Ltd. are discounted zero coupon participating notes, which suggests that again this is the transformation of a collateralised reinsurance deal with the coupon having been paid as premium and the notes created to provide an investor (or investors) with liquid securitised access to the underwritten risk.

The $85m of notes have a due date of April 7th 2017, so represent a single annual reinsurance contract, it would seem. It’s safe to assume that these notes are exposed to property catastrophe reinsurance risks, but of what type we do not currently know.

It is highly likely that this transaction is designed to cover an April reinsurance renewal cedent. It is possible that this latest Resilience Re private cat bond is for the CEA’s reinsurance program, as the organisation had another renewal due at the start of April, however we cannot confirm that at this stage.

The Resilience Re platform uses a syndicated deal marketing process, which can be used alongside the traditional reinsurance placement process or as a standalone way to access the capital markets, so provides a lower-cost way for sponsors to maintain relationships with ILS and cat bond investors even if not doing a full-blown 144A broadly marketed issuance.

With the listing on the BSX, the investors in this $85m Resilience Re Ltd. (Series 1642B) private catastrophe bond will benefit from enhanced secondary liquidity in the notes.

As this transaction was issued through the Resilience Re platform Willis Capital Markets & Advisory will have played the joint roles of structuring agent and bookrunner for this private cat bond deal.

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

You can read all about this and every other catastrophe bond in the Artemis Deal Directory.

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