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Original Risk: A Society for Change Agents

Ibis Re II and Kibou catastrophe bonds both likely to upsize before close


Two of the catastrophe bonds which are still being marketed to investors are likely to upsize before close according to sources in the investor community. Demand has been strong for both the latest cat bond from Assurant, Ibis Re II Ltd. Series 2012-1 and the return to the cat bond market from Zenkyoren with their Kibou Ltd. Japan earthquake bond. Both deals have increased their targeted size and should close soon.

Ibis Re II Ltd. is a U.S. hurricane cat bond being issued by sponsoring insurer Assurant. Originally targeting $100m of cover in two tranches ($70m Class A notes and $30m Class B), it is now targeting $130m and the Class A tranche of notes is targeting $100m. Both tranches use a county-weighted industry loss index created with data from Verisk.

Kibou Ltd. which is a much welcomed Japanese earthquake bond being issued on behalf of Japanese cooperative insurer Zenkyoren by sponsor Hannover Re was first marketed as a $150m single tranche of notes. This deal is now targeting somewhere between $200m to $300m of cover for Zenkyoren. We’re not surprised that this deal is in demand as it offers investors a good opportunity to diversify their holdings.

Both deals should be completed within a week we believe and we will update you here, and in our Deal Directory, once we have final details for you.

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