Jardine Lloyd Thompson Capital Markets (JLTCM) ILS structuring and issuance team has completed another privately placed catastrophe bond transaction, a $75m Market Re Ltd. (Series 2016-3) transaction for a U.S. sponsor.
The JLTCM team has been prolific in recent weeks, completing a number of private cat bond deals through its Market Re platform for smaller U.S. focused ceding insurers, as well as the latest Oak Leaf Re cat bond for a Florida based cedent.
This latest transaction saw $75m of notes issued in a Series 2016-3 transaction using the JLTCM Market Re Ltd. private cat bond platform, as the unit for the JLT global insurance and reinsurance brokerage team demonstrated its ability to bring continued deal-flow to the ILS market at a quieter time of issuance.
The Market Re 2016-3 private cat bond issuance saw a U.S. ceding insurer securing three years of indemnity-based collateralized catastrophe reinsurance protection for its largely New Jersey book of business. The transaction was issued in a single $75m tranche of notes.
“Investor interest for the diversifying geographic risk was strong and the deal was over-subscribed, closing at the tight end of guidance,” commented Michael Popkin, Managing Director and Co-Head of Insurance-Linked Securities at Jardine Lloyd Thompson Capital Markets. “The growing size of our Market Re deals conveys the strong acceptance of the platform.”
“As the overall process of coming to market becomes increasingly efficient, both in terms of cost and timing, we are seeing cedents making effective use of the Market Re platform to transfer risk to the capital markets,” added Rick Miller, Managing Director and Co-Head of Insurance-Linked Securities at Jardine Lloyd Thompson Capital Markets.
Ed Hochberg, CEO of JLT Re North America and Capital Markets, also said “we continue to tie together the various components of JLT’s services, namely brokerage, analytics, and capital markets, to provide our clients with comprehensive solutions and efficient risk transfer.”
The Market Re series of transactions are now bringing ILS investors a regular and significant amount of risk capacity to invest in, while also offering smaller U.S. ceding companies with a way to access collateralized reinsurance capacity from the capital markets more efficiently.
Privately placed cat bonds (or cat bond lites) play an increasingly important role for both the sponsors and ILS investors or fund managers who back the deals as they search for more securitised product. As an efficient way to access the capital markets, in order to source fully collateralised protection, private cat bond vehicles remain an important tool for reinsurance or retrocession buyers.