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Liberty Mutual in new $150m Limestone Re sidecar deal


Global insurer Liberty Mutual Insurance has completed its third reinsurance sidecar transaction through its Limestone Re Ltd. vehicle, with a $150 million arrangement that was largely privately placed.

This latest Limestone Re sidecar transaction will provide Liberty Mutual with $150 million of collateralized reinsurance capacity to support its U.S. property catastrophe program, U.S. homeowners and global property reinsurance businesses.

This 2019 Limestone Re transaction has been completed through the issuance of listed notes and an unspecified number of private placements directly with investors.

Limestone Re Ltd., a Bermuda domiciled segregated account company,  issued $58 million of Series 2019-1 notes, which were listed on the Bermuda Stock Exchange (BSX), while the remainder of the capacity was provided through private placements.

“The Limestone Re platform continues to be an integral component of Liberty Mutual’s strategy for accessing third-party capital,” commented James Slaughter, Senior Vice President and Chief Underwriting Officer of Liberty Mutual’s Global Risk Solutions strategic business unit.

“Liberty Mutual’s global reach makes us uniquely positioned to provide insurance-linked securities (ILS) investors diversified pools of risk while bringing them as close as possible to the underlying insurance risks,” Slaughter added.

Arno Gartzke, Vice President and Director of ILS at Liberty Mutual noted that this Limestone Re transaction has replaced the expiring Limestone Re 2016-1 placement.

That 2016-1 placement was actually $10 million larger, at $160 million. Hence this is a slight downsizing of that January renewal issuance.

The listed portion of this Limestone Re issuance came in a $27.734 million tranche of Class A Participating Notes and a $30.366 million tranche of Class B Participating Notes, both due September 9th 2022.

However, Liberty Mutual had issued a much larger $278 million sidecar transaction through Limestone Re in June 2018, which more than makes up for the slight shrinkage of this deal.

Gartzke said, “Liberty Mutual remains committed to the ILS market and the continued support from our key partners, despite challenging market conditions, reaffirms the quality of risks which investors can access via Limestone Re.”

Limestone Re has been used for private placements before, previously Slaughter said the vehicle has transacted roughly $700 million of deal volume.

For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.

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