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Dodeka XVIII private cat bond from Twelve Capital has maturity extended


Another of the Dodeka series of private catastrophe bonds, issued for ILS and reinsurance focused investment manager Twelve Capital, has had its maturity extended, likely to allow for a cedent’s catastrophe loss development to continue.

Twelve Capital logoThe $25.181 million Dodeka XVIII private cat bond was issued in January 2019 and saw ILS fund manager Twelve Capital continuing its strategy of sourcing property catastrophe risks in securitised and liquid form for its ILS fund mandates and investors.

The Dodeka series of transactions feature privately securitized and placed cat bonds that allow Twelve Capital to transform property catastrophe reinsurance or retrocession risks, typically an industry-loss warranty (ILW), into an investable form suited for its more liquid catastrophe bond fund strategies.

This particular Dodeka private cat bond covered an unknown cedent for a one-year term, with maturity due January 9th 2020.

But that maturity has not happened and now the maturity date for the $25.181 million of Dodeka XVIII private cat bond notes has been extended to July 5th 2020.

The maturity extension will be to allow for the covered cedent’s catastrophe losses to develop further, we imagine.

Extension of maturity in ILS contracts, such as these private cat bonds, is business as usual. Typically this is activated when an industry loss, or a ceding company’s own indemnity, requires further time to develop before a final determination can be made as to whether any loss payment is due under the transactions contract terms.

Last October, we revealed the maturity extension of a first Dodeka private cat bond, as the $9.269 million Dodeka XV private cat bond had its maturity pushed back.

That transaction eventually matured in full with no losses we believe.

It then became clear in December that a $17.96 million Dodeka XXI transaction was facing a loss, as a loss reserve of around 8% of principal was established for this private cat bond arrangement.

So this is the third Dodeka private cat bond to face a potential impairment, although at this stage no loss reserve has been established for the Dodeka XVIII transaction it seems.

Twelve Capital’s series of Dodeka private cat bond transactions have now covered more $500 million of risk capital sourced, transformed and issued in catastrophe bond form since 2014.

Details on every Dodeka private cat bond transaction can be found in the Artemis Catastrophe Bond Deal Directory.

These transactions demonstrate ILS fund manager Twelve Capital’s commitment to sourcing reinsurance risks in securitised cat bond form to satisfy its ILS fund investors.

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