Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Mitsui Sumitomo’s Akibare II Ltd. catastrophe bond upsizes to $130m


Akibare II Ltd. a Japan typhoon catastrophe bond sponsored by Japanese insurer Mitsui Sumitomo Insurance Co. Ltd. has priced and been upsized just prior to closing according to sources. The Akibare II cat bond will be exposed to Japanese typhoons and tropical storms (including both wind and flood losses) over a four-year period until the end of March 2016 and will provide fully collateralized multi-year protection to Swiss Re, the risk transfer contract counterparty and ultimately to Mitsui Sumitomo on a modelled loss basis.

The Akibare II deal began marketing as a single tranche of notes targeting $90m of coverage for the sponsor. At pricing today we are told that the tranche of Series 2012-1 Class A notes had grown in size to $130m and the notes will pay a coupon of 3.75% above Treasuries.

The pricing is actually above the guide price range that this cat bond began marketing with, meaning that the cover will have cost the sponsor slightly more than they originally expected. That might explain the upsizing as they may have decided to secure more cover to make the deal more economical. Although being a Japan typhoon cat bond and having a modelled loss trigger will have made this deal attractive to investors looking for diversification opportunities. We’ll update you if more details become available as this deal closes.

Full details on Akibare II can be found in our catastrophe bond Deal Directory.

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