German reinsurance firm Hannover Re has facilitated a second private catastrophe bond this month with the completion of a $27 million Seaside Re (Series 2018-3) transaction, the second series of cat bond notes to be issued through its Kaith Re Ltd. Bermuda domiciled segregated accounts vehicle in recent days.
Just over a week ago a $20 million Seaside Re (Series 2018-1) private cat bond, or cat bond lite as they are often termed, was issued using Hannover’s Kaith Re reinsurance vehicle, which as we explained at the time saw the reinsurer acting as a risk transformer and facilitator in securitising property catastrophe risks.
This second transaction, the $27 million Seaside Re 2018-3 issuance, again saw Hannover Re acting as a service provider for a cedent looking to access capital markets backed reinsurance or retrocession capacity, securitising reinsurance risks using through a segregated cell of Kaith Re.
This 2018-3 issuance saw Kaith Re Ltd., acting on behalf of its segregated account named Seaside Re, issue one $27 million tranche of Series 2018-3 private cat bond notes. The notes have been issued pursuant to the Seaside Re bond program which was established and listed just over a year ago.
The single $27 million tranche of Series 2018-3 notes, issued by segregated account Seaside Re, are due January 15th 2019, so represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most common with private cat bonds. Being the same due date as the 2018-1 tranche, it is possible that the two series of notes involve the same participants, ILS investors or funds.
The Seaside Re bond program defines the covered perils as being U.S. property catastrophe risks, however further details of the exact nature of this 2018-3 transaction and the reinsurance or retrocessional coverage it provides are unavailable at this time.
The $27 million tranche of notes issued by Seaside Re in this 2018-3 transaction have been admitted for listing on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities and have been placed with qualified ILS investors.
Hannover Re plays a key role for certain cedents and ILS investors to enable them to transform and securitise reinsurance risks into investable note forms with these private ILS transactions.
We’ve added this $27 million Seaside Re (Series 2018-3) private cat bond to the Artemis Deal Directory and what information we have will be included in all of our catastrophe bond and ILS market statistics.
Join us in New York in February 2018 for our next ILS conference