Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Kane SAC platform issues $9.722m Series Ax private cat bond notes


A new private catastrophe bond issuance has completed and listed in Bermuda using the Kane SAC Limited Note Program. $9.722m of Kane SAC Limited – Series Ax Notes were listed on the Bermuda Stock Exchange (BSX) yesterday.

It’s the sixth listed issuance to use the Kane SAC private ILS and cat bond note platform, operated by global independent insurance management firm Kane, this year. In 2015 Kane was also responsible for facilitating another four private cat bonds under the Dodeka series from ILS manager Twelve Capital.

This $9.722m of notes have been issued by Kane SAC Limited using a Series Ax Notes account. The notes have been listed on the BSX as insurance related securities, and have a due date of 10th June 2016.

Kane also listed a new program under its Kane SAC Limited issuance vehicle yesterday as well. The ILS Note Program II is likely the program that the Series Ax Notes have been issued under.

As usual, we don’t have any additional information on the perils at risk from the underlying reinsurance contract in this issuance, or the trigger type at this time. We will update you should that information become available.

Typically these deals involve peak catastrophic perils and with triggers either an industry loss or indemnity structure.

Platforms such as the Kane SAC Limited Note Program enables investors and ILS managers a chance to access risk in securitized form more cheaply and from smaller transactions than the main 144A cat bond market allows.

Many institutional investors, such as pension funds, have mandates that insist on secondary liquidity in their ILS investments. Also ILS managers operate funds with liquidity restrictions on the investments they can make. This makes securitised notes a preferred option to deploying capital into collateralized reinsurance, hence the transformation to private cat bond notes on the platforms.

Using a private issuance platform that allows an underlying reinsurance contract to be transformed into securitised notes with secondary transferability is becoming increasingly popular. 2015 has already seen record use of private cat bond platforms and cat bond lites.

This transaction has been added to our Deal Directory. If further information becomes available we will update you.

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