Swiss Re Insurance-Linked Fund Management

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Dodeka VI, $19.087m private cat bond completed by Twelve Capital


Swiss headquartered ILS investment fund manager Twelve Capital has completed another private catastrophe bond deal, with a $19.087m Dodeka VI transaction listing on the Bermuda Stock Exchange today.

It’s the second Dodeka private cat bond, or cat bond lite, to complete in a month, after the $18.88m Dodeka V deal came to market at the beginning of June. The reinsurance and ILS market’s use of smaller cat bond deals continues apace in 2015.

As usual details are scant, as is the way with private cat bond transactions.

ILS manager Twelve Capital uses the Dodeka series of deals as a way to generate liquid securities out of reinsurance transactions it had collateralized. Enabling it to work with specific investor clients that require the liquidity of a securitised deal such as this, or to acquire liquid, securitised risk for its own fund mandates.

Dodeka VI has, as usual, been issued through the Kane SAC Limited vehicle. Dodeka VI represents a segregated account of the Kane SAC Limited private cat bond issuance vehicle. The $19.078m of notes have a due date of the 20th January 2016, so represent just over a six month reinsurance contract.

As with all the other Dodeka deals, it is likely that this is a transformed industry-loss warranty (ILW) contracts, using a PCS industry loss triggers and so covering U.S. natural perils. We can’t confirm, but our understanding of all the prior Dodeka’s is that this is the model Twelve Capital are following.

ILW’s perhaps represent the simplest transactional features for transformation, making them the most cost-effective way to acquire risk in a liquid securitised form for fund managers like Twelve Capital.

The $19.078m of Dodeka VI notes have been listed on the Bermuda Stock exchange. In this way the  liquidity of the notes is enhanced, providing Twelve Capital with improved options and additional transparency to trade the notes on the secondary cat bond market.

Previous Dodeka private cat bond transactions include Dodeka I in January 2014, Dodeka II in February 2014, Dodeka IV in June 2014, Dodeka III in August 2014, Dodeka I – 2015 in February 2015 and Dodeka V in June 2015.

Dodeka VI has been added to the Artemis Deal Directory and we will update the listing should additional details on the underlying structure emerge.

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