Eclipse Re Ltd., the Horseshoe managed private syndicated collateralised reinsurance note and private cat bond platform, has completed two new transactions, amounting to just under $56.6 million of risk capital issued around the mid-year renewal season.
Eclipse Re Ltd. is a Bermuda domiciled special purpose insurer (SPI) and segregated account company designed to facilitate issuance of insurance-linked securities (ILS) notes, through the transformation, securitisation and ultimately syndocation to investors of reinsurance and retrocession arrangements.
Not every Eclipse Re private catastrophe bond is syndicated though and in recent years a number of issuances from the vehicle have been for the benefit of specialist ILS fund manager Fermat Capital Management, as the sole investor behind some of the deals.
The third and fourth issuances from Eclipse Re came to light at the end of last week, as the vehicle completed and listed a $16.59 million Eclipse Re Ltd. (Series 2020-03A) transaction and a $40 million Eclipse Re Ltd. (Series 2020-04A) transaction.
First, the $16.59 million Series 2020-03A issuance from Eclipse Re, which appears to be a private cat bond or securitisation of a collateralised reinsurance arrangement that runs across a roughly one-year term and represents the vehicles segregated account EC0028, with maturity scheduled for June 1st 2021.
It’s likely this first deal was issued around the June reinsurance renewal, which suggests the underlying risks could be Florida wind based, although we cannot be certain so categorise this as an unknown property catastrophe risks arrangement.
Secondly, the larger $40 million Series 2020-04A issuance from Eclipse Re, which looks to be a private cat bond or securitisation of a collateralised reinsurance or retro arrangement that runs just across the U.S. wind season and represents segregated account EC0029, with maturity due December 15th 2020.
Again, we assume this is from either the June or July renewals and that it appears to be U.S. wind related given its relatively short tenure would cover the hurricane season, but again we categorise this as an unknown property catastrophe risks arrangement as we cannot be certain.
The notes issued under both of the transactions have been placed with qualified investors and admitted to the Bermuda Stock Exchange (BSX) as insurance-related securities.
The proceeds from the sale of these notes will have been used as collateral to underpin the related reinsurance or retrocession contracts.
Horseshoe’s Eclipse Re issuance vehicle was among the most prolific structures for private cat bond issuance in 2019, responsible for some $300 million or so of private insurance-linked securities (ILS) arrangements across seven issues, a near doubling of its 2018 activity in terms of volume.
The Eclipse Re private cat bond transformer and issuance vehicle saw significantly more use in 2019 than in previous years, which was assisted by the fact specialist cat bond and ILS fund manager Fermat Capital Management became a significant user of the platform for some of its risk transformation deal flow.
In 2020 so far, now with four issues under its belt, the Eclipse Re platform has been responsible for $86.6 million of private cat bond or ILS risk capital issued.
Leading ILS and reinsurance market service provider and facilitator Horseshoe takes the lead as manager for these Eclipse Re transactions, given it operates the special purpose vehicle as part of its offering to clients.
Platforms like Eclipse Re benefit ILS fund managers and investors by enabling reinsurance or retrocession arrangements to be channelled to them through a risk transformation and securitisation platform like Eclipse Re, with investable notes suited to a more liquid ILS fund strategy the resulting asset.