Argo Re issues $100m Loma Reinsurance Ltd. Series 2011-2 cat bond


Argo Re have returned to the catastrophe bond market to issue their second deal during 2011 under their Loma Reinsurance Ltd. Cayman Islands based special purpose insurer. This transaction has been placed in the market without fanfare and without seeking a rating from any of the major ratings agencies as far as we are aware. We understand that the transaction has now completed and the notes issued in this Series 2011-2 tranche have listed on the Cayman Islands stock exchange.

Argo were pleased with the way their Loma Re 2011-1 cat bond, their first ILS transaction which they issued in June, provided them with a multi-year source of industry-loss based reinsurance cover at a reasonable price and it’s assumed that they have seen an opportunity to increase this cover in the run up to the January renewals.

This latest Loma Reinsurance Ltd. Series 2011-2 cat bond provides Argo Re with another $100m of cover for multiple perils and runs for a two-year period with maturity scheduled for January 2014, the earlier Loma Re deal expires in December 2012. Details of this transaction are scarce but it is possible that the perils covered are the same as their previous deal and so could include U.S. hurricane, U.S. earthquake, European windstorm and Japan earthquake.

The first Loma Re cat bond provided second and subsequent event coverage above a $30 billion industry loss level and included activation and second event specific index trigger values. This second Loma Re deal is understood to cover a higher layer of cover and so Argo Re are extending their peak peril cover for the very largest of natural catastrophe events.

Loma Reinsurance has issued a $100m tranche of Series 2011-2 Class A notes and these have now been admitted for listing in the Cayman Islands.

This deal has been added to our catastrophe bond deal directory and we will update you if more details come to light.

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