Eclipse Re in $8.73m private cat bond issuance

Eclipse Re Ltd., the Artex-managed and operated private syndicated collateralised reinsurance note, private catastrophe bond issuance and reinsurance transformer platform, has completed the issuance of an $8.73 million Eclipse Re Ltd. (Series 2022-2A) transaction in recent days.

This is the second privately placed insurance-linked securities (ILS) transaction of 2022 that we have listed in our extensive Deal Directory from private catastrophe bond transformer and issuance platform Eclipse Re Ltd.

Eclipse Re Ltd. is a Bermuda domiciled special purpose insurer (SPI) and segregated account company that is managed by insurance-linked securities (ILS) market facilitator and service provider Artex Risk Solutions.

This second issuance from Eclipse Re of 2022 is a relatively small transaction, and has a term that suggests this is likely a US wind protection, as it runs through the Atlantic hurricane season.

Eclipse Re Ltd. has issued $8.73 million of Series 2022-02A notes, with the notes having a final maturity date, of January 1st 2023.

Eclipse Re is typically leveraged for the issuance of insurance-linked securities (ILS) notes, via the transformation, securitisation and ultimately transfer to one, or syndication to a group of investors, of reinsurance or retrocession arrangements.

The main use-cases are issuance of privately syndicated collateralised reinsurance notes, or private catastrophe bonds, with an ability to cover a wide range of underlying structures and perils, or lines of insurance business.

Eclipse Re private cat bonds aren’t always broadly syndicated though, with the structure often used as a transformer for an ILS fund manager, to help them securitize a risk and make it investable for a catastrophe bond strategy.

In 2021, private catastrophe bond issuance that we recorded in our Deal Directory surpassed $1 billion for the first time.

So far in 2022, issuance of private cat bonds is now approaching $500 million.

As ever, we assume this latest Eclipse Re deal features property catastrophe risk-linked notes, providing an unnamed protection buyer, or ILS fund, with reinsurance or retrocession protection just to the end of 2022.

Because of this, there’s a strong chance it’s a protection running for the US wind season, although it could also be a carrier needing a slice of reinsurance from the cat bond market to run up to the January renewals.

The proceeds from the sale of the $8.73 million of private catastrophe bond notes will have been used as collateral to underpin a related reinsurance or retrocession contract, held in a trust.

The $8.73 million of private cat bond notes have been placed with qualified institutional investors and were admitted to the Bermuda Stock Exchange (BSX) as insurance-related securities for a listing, with Artex also acting as the listing sponsor through its Artex Corporate Services (Bermuda) Ltd. unit.

ILS and reinsurance market service provider and facilitator Artex always takes a lead role as the manager for these Eclipse Re Ltd. transactions, with this special purpose vehicle a key part of its ILS infratsurtcure offering to clients.

Update: On collection of additional deal data we’ve now recalculated prior year private catastrophe bond issuance and the total issuance from 2017 has now overtaken 2021, making that the record year at $1.1 billion.

You can track cat bond and related ILS issuance by year and type of transaction in this chart.

You can also view details of every private cat bond we’ve tracked by filtering our Deal Directory to see private ILS transactions only.