ILS vehicle listed for Tullet Prebon insurance-linked note platform


An insurance-linked securities (ILS) vehicle has been listed on the Bermuda Stock Exchange (BSX) that will ultimately house transactions entered into on the Tullett Prebon owned Insurance Linked Notes issuance and trading platform.

Tullett Prebon, an electronic and voice interdealer broker that is part of the TP ICAP group, announced the launch of a trading and issuance platform for what it has termed Insurance Linked Notes (ILN’s) in September of this year.

The platform will initially featuring catastrophe industry-loss ILN instruments, that will be fully-securitised to give the risk cedant access to a wide range of capital market counterparties, while the investors will benefit from secondary liquidity options.

Work has been ongoing to get the ILN platform ready for business, not least with the onboarding of likely insurance and reinsurance cedants, as well as the all-important investors and ILS fund managers likely to invest in any issuances.

Any ILN’s issued using the platform will be transacted using a Bermuda based special purpose vehicle, a segregated accounts structure named ILN SAC Ltd.

The vehicle was registered in September, since when preparations for use and the ongoing marketing of the platform have continued.

It now seems that activity on the platform is getting closer, perhaps with issuances expected around year-end to tie in with the traditional reinsurance renewal cycle.

In recent days, the BSX reported the listing of the ILN SAC Ltd. Insurance Linked Notes Programme on the exchange, an important step in the vehicle being ready for activity on the Tullet Prebon platform.

With the programme now listed as an International Issuer of Insurance Linked Securities, the Tullet Prebon platform has the ability to list tranches of notes that are issued to support and capitalise specific segregated accounts within the ILN SAC Ltd. vehicle.

The ILN platform from Tullet Prebon offers an efficient way for cedants to access the capital markets and for investors to allocate to securitised insurance and reinsurance risk. With the structure underpinning the market now seemingly in place it will be interesting to see how much deal-flow the platform can transact and trade across the coming renewals.

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