Eclipse Re Ltd., a private syndicated collateralised reinsurance note, private catastrophe bond issuance and reinsurance transformer platform owned and operated by Artex Capital Solutions, has completed the issuance of two private cat bond arrangements totalling almost $18.8 million of risk capital issued.
These are the first issuances of private catastrophe bond notes through the Eclipse Re Ltd. platform so far in 2023.
Eclipse Re Ltd. is a Bermuda domiciled special purpose insurer (SPI) and segregated account company.
The vehicle is managed by insurance-linked securities (ILS) market facilitator and service provider Artex Capital Solutions and is used in the main by ILS fund managers, with Fermat Capital Management one of the names linked with the structure in recent years.
For its first two issues of 2023 that we have encountered, Eclipse Re Ltd. has issued an $8.73 million Eclipse Re Ltd. (Series 2023-1A) deal and a very nearly $10 million Eclipse Re Ltd. (Series 2023-2A) deal, each on behalf of different segregated accounts of the vehicle.
The proceeds from the sale of these roughly $18.8 million of private cat bond notes that have been issued by Eclipse Re, will have been used as collateral to underpin related reinsurance or retrocession contracts, with the collateral held in trust.
The $8.73 million of Series 2023-01A notes were issued on behalf of Eclipse Re’s Segregated Account EC51, with these notes having a final maturity date, of January 1st 2024.
The $10 million of Series 2023-02A notes were issued on behalf of Eclipse Re’s Segregated Account EC52, with these notes also having a final maturity date, of January 1st 2024.
We don’t know the underlying perils, but Eclipse Re cat bonds tend to be property catastrophe risk focused. In addition, we do not know the type of trigger used for the coverage.
The Eclipse Re private cat bond platform has been one of the most prolific in recent years, with almost $300 million of ILS deals issued through the structure in 2019, $107 million in 2020, then $411 million of private cat bonds issued in 2021.
Last year, in 2022, we listed seven Eclipse Re private cat bond issues in our Deal Directory, totalling almost $189.3 million of risk capital issued.
In 2023 so far, issuance of private catastrophe bonds has been a little slow, with now only $117.33 million of these privately placed cat bonds tracked by Artemis so far this year.
Eclipse Re typically issues 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.
As a result, its main use-cases are issuance of privately syndicated collateralised reinsurance notes, or private catastrophe bonds (cat bond lites), 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 and the structure has often been used as a transformer for an ILS fund manager, to help it securitize a risk and make it investable for a catastrophe bond fund strategy.
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.