The Gator Re Ltd. catastrophe bond transaction has again had its maturity extended even further, we understand, as the time to clarify the full loss and facilitate the pay-out due to sponsor American Strategic Insurance increases.
Recently the Gator Re cat bond was extended by a month, with maturity moved forward to the 9th April 2017.
Now another month has been added, in order to allow for any further development of losses its assumed, with maturity of the Gator Re notes extended again to 9th May 2017.
Aggregated severe thunderstorm claims are the cause of the impact to the Gator Re catastrophe bond, with losses having breached the attachment point enabling American Strategic to benefit from the reinsurance cover the notes provide.
An extension notice was served retaining $35 million of the cat bond investment principal in January, as the sponsor anticipated claims of up to that amount, so releasing the other $165 million principal of the $200 million of Gator Re notes.
Sponsor American Strategic then reported that it had made a $29.5 million recovery under the Gator Re cat bond reinsurance protection, so leaving $6.5 million of the retained and extended $35 million of principal still available.
So this further extension of maturity could allow American Strategic to continue counting claims from the qualifying severe thunderstorm events it suffered from in 2016, perhaps leading to a little more reinsurance recovery for the firm.
We should note that it could just be that the extra time is required to finalise the reinsurance payment, but at least investors in the Gator Re cat bond can be sure the loss will not move any higher than the $35 million of retained principal.