The Eclipse Re Ltd. private catastrophe bond and insurance-linked securities (ILS) issuance vehicle that is managed by Horseshoe Group has completed and listed its fifth private cat bond of the year, a $56.6 million Eclipse Re Ltd. (Series 2019-02A) transaction.
In previous years the Eclipse Re Ltd. private cat bond vehicle has only managed two issuances per-year, so the five now issued in 2019 is a significant increase on the vehicle’s ILS transaction activity levels (at least the activity that is visible to us).
Eclipse Re provides a plaform for insurance-linked securities (ILS) funds or investors to engage in reinsurance and retrocession contracts more directly with ceding companies, with the result being a risk transfer arrangement transformed and securitized into private cat bond form.
ILS and reinsurance market facilitator Horseshoe Group is the lead facilitator on these Eclipse Re transactions.
In its fifth deal of 2019, Eclipse Re Ltd. has issued a single $56.6 million tranche of private catastrophe bond notes, which have been sold to investors or ILS funds.
The proceeds from the sale of the notes will have been used as the collateral to underpin linked reinsurance or retrocession contracts.
The $56.6 million Eclipse Re Ltd. (Series 2019-02A) transaction saw special purpose Bermudian insurer Eclipse Re Ltd. issuing one tranche of Series 2019-02A notes from its segregated account SAC EC0020, with the notes having a due date of June 1st 2020.
We assume the issued private cat bond notes represent a one-year reinsurance or retrocession contract underwritten at the mid-year renewals, likely featuring U.S. wind, earthquake or other U.S. natural perils risks, given the contract running to the start of June 2020.
The single tranche of notes has been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance related securities.
Horseshoe Group acted as the listing sponsor for the notes, through its Horseshoe Corporate Services Limited entity.
So far in 2019 Eclipse Re has issued a $20 million Eclipse Re Ltd. (Series 2019-01A) deal, a $30 million Eclipse Re Ltd. (Series 2019-03A) deal, a $100 million Eclipse Re Ltd. (Series 2019-05A), and most recently a $25 million Eclipse Re Ltd. (Series 2019-04A) deal.
We know that the most recent $25 million transaction featured ILS investment fund manager Fermat Capital Management using Eclipse Re to participate in the Florida Citizens reinsurance renewal this year.
We understand Fermat Capital Management uses Eclipse Re for other transactions, but details are not available on the other four to have been issued in 2019 so we cannot confirm any link to the ILS manager.
Including this new $56.6 million transaction, Eclipse Re has now been responsible for $231.6 million of private catastrophe bond issuances so far in 2019.
The Eclipse Re Ltd. platform was launched in 2017 to offer collateralized reinsurance providers a way to transform, securitize, market and place transactions with investors as private ILS or cat bond notes with secondary liquidity features.