Guy Carpenter’s Cerulean Re platform lists $83m private ILS notes in Bermuda

Cerulean Re SAC Ltd., a private catastrophe bond and insurance-linked securities (ILS) issuance vehicle operated by Guy Carpenter and Marsh Captive Solutions, has listed almost $83 million of private ILS notes on the Bermuda Stock Exchange (BSX).

It’s the first time that the Cerulean Re vehicle has issued and listed notes on the exchange, having completed what we believe to be its first transaction in recent weeks, a $60 million private cat bond sponsored by Bermuda-based reinsurance firm Hamilton Re.

Cerulean Re SAC Ltd. has listed a private insurance-linked securities (ILS) note program on the BSX, named the Cerulean Re SAC Ltd ILS Notes Program.

Along with the listing of its ILS notes program, Cerulean Re SAC Ltd. has also listed five tranches of notes, which together amount to just under $83 million of issuance.

The listed notes include two tranche of principal at risk variable rate notes. A $35 million tranche of Series 2019-1 Class A notes and a $25 million tranche of Series 2019-1 Class B notes.

The $35 million of Class A notes are due January 8th 2020, while the $25 million of Class B notes are due June 5th 2020.

These two tranches correspond very closely to the $60 million Easton Re private catastrophe bond issued on behalf of sponsor Hamilton Re earlier this summer, which featured two tranches of notes, one covering U.S. wind across a risk period ending Dec 31st 2019, so a single hurricane season, and one covering U.S. earthquake across a risk period ending May 31st 2020.

So the $35 million of Cerulean Re Series 2019-1 Class A notes could be Hamilton Re’s Easton private cat bond wind tranche, while the $25 million of Class B notes could be Hamilton Re’s Easton quake tranche of notes.

Cerulean Re has also listed three other tranches of private ILS notes which are all zero-coupon on nature.

These are, a $7.98 million tranche of Series 2019-1 Class A-1 notes, a $10.48 million tranche of Class B-1 notes and a $4.48 million tranche of Class B-2 notes, which are all due June 1st 2020.

No further details are available on these tranches.

It is possible they could be private, bilateral participation in Hamilton Re’s retro program by ILS investors, given their listing alongside the other two tranches that appear to be the Easton cat bond. But they could also just be other private ILS deals that have been issued around the same time and so listed alongside the other notes.

Either way, it is encouraging to see the Cerulean Re private cat bond platform gaining traction.

The Cerulean Re vehicle was established in 2017 by Guy Carpenter’s capital markets and ILS specific unit GC Securities and parent MMC’s Marsh Captive Solutions unit as an efficient vehicle for issuing catastrophe bonds on client sponsors behalf’s.

As a result, GC Securities will have acted as sole arranger, structuring agent and placement agent or bookrunner for all of these tranches of private cat bond notes.