AXIS Capital, the global specialist re/insurer headquartered in Bermuda, has added another tranche of notes to its collateralised reinsurance sidecar vehicle Alturas Re Ltd., sponsoring a $39 million issuance, the third from the sidecar for 2019, we can reveal.
In total this takes the amount of capital backing AXIS Capital’s Alturas Re sidecar to $169 million for 2019, after the re/insurer sponsored two tranches earlier this year.
The first issuance from Alturas Re Ltd. was a $55 million tranche of notein late December 2018, a Series 2019-1 Class A tranche which provided investors with access to the returns of a portfolio of property insurance risks.
AXIS Capital coupled this with the issuance of a larger $75 million Series 2019-2 Class A tranche of notes which were issued using Alturas Re to provide the re/insurer with collateralised retrocession support for its property catastrophe reinsurance portfolio.
The latest Alturas Re sidecar issuance, of a $39 million tranche (now confirmed, after earlier confusion over the size of this tranche due to incorrect listings information) of Series 2019-3 Class A participating notes, came to market last week. These notes have a due date of September 2023, so six months later than the first two series of notes that Alturas Re issued, which both run their terms until March 2023.
It’s not clear at this stage whether the $39 million of Alturas Re 2019-3 notes are backing a portfolio of property insurance or property catastrophe reinsurance at this stage. Either could be the case, given AXIS’ dual use of the sidecar vehicle earlier this year.
So the Alturas Re sidecar is now providing AXIS Capital with a fully collateralised $169 million source of reinsurance and retrocessional protection, funded by capital market and insurance-linked securities (ILS) investors.
Alturas Re sits alongside other third-party capital arrangements that AXIS Capital has, including its direct quota share partners.
The Alturas Re sidecar allows AXIS Capital to take greater control of these quota share style cessions to investors and to earn a share of fee income through managing them within its own vehicle, rather than ceding them to an investor owned protected cell structure.
It’s also worth remembering that AXIS has also tapped capital market investors with a $165 million catastrophe bond in recent days.
We’ll bring you more information if any further details on the latest issuance from AXIS Capital’s Alturas Re sidecar vehicle emerge.
For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.
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