MS Amlin repeats Asian cat risk sidecar with $37.5m Phoenix 2 Re

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MS Amlin has returned to the capital markets for a repeat of its landmark Asian property catastrophe risk collateralised reinsurance sidecar arrangement, with a $37.5 million issuance of Series 2022-1 notes through newly established Singapore SPV Phoenix 2 Re Pte. Ltd.

ms-amlin-logoMS Amlin, through its Singapore based subsidiary MS Amlin Asia Pacific Pte. Ltd., launched the first pure Asian catastrophe risk focused sidecar a year ago, with the special purpose reinsurance vehicle (SPRV) Phoenix 1 Re Pte. Ltd. issuing almost almost $42.14 million of Series 2021-1 private insurance-linked securities (ILS) notes.

That arrangement saw quota share reinsurance arrangements covering more than ten Asia Pacific peak peril regions delivering diversified access to Asia Pacific catastrophe risk to the investors backing the sidecar deal.

For 2022, the arrangement has been replicated, it seems, with a new special purpose reinsurance vehicle (SPRV) Phoenix 2 Re Pte. Ltd. established in Singapore for what is the second sidecar deal to be hosted by the domicile.

We assume that similar to the first sidecar, the beneficiary is MS Amlin Syndicate 2001’s Asia specific catastrophe reinsurance portfolio, written through its Singapore based underwriting platform, the MS Amlin Asia Pacific Pte. Ltd. division.

As with the 2021 deal, this isn’t a catastrophe bond issuance as the underlying is quota share based, although the resulting participating notes issued do look very similar to the investors.

This new Asia Pacific sidecar offering from MS Amlin saw the Singapore based special purpose reinsurance vehicle (SPRV) Phoenix 2 Re Pte. Ltd. issuing $37.5 million of Series 2022-1 participating notes, structured across two tranches.

That’s different to the first Phoenix 1 Re sidecar, which was a single tranche offering.

The use of multiple tranches of notes implies the Phoenix 2 Re sidecar has been structured to offer more choice to investors, perhaps with each tranche representing a different level of risk, or portfolio of subject business.

Phoenix 2 Re Pte. Ltd. issued a $9.375 million tranche of Series 2022-1 Class A notes and a $28.125 million tranche of Series 2022-1 Class B notes, with both sets of notes having a due date of January 4th 2028.

The notes have all been privately placed with unknown investors and the long-dated nature of the notes is similar to the prior year deal.

We’re told by sources that the underlying sidecar quota share is variable in nature and that it may be a little higher risk, in expected loss terms, than the first Phoenix sidecar from MS Amlin.

We also understand that the Phoenix 2 Re reinsurance sidecar has been specifically designed to be complementary to the first transaction, as MS Amlin builds out this new protection and risk sharing arrangement in Asia Pacific.

It’s encouraging to see MS Amlin building on its first Phoenix sidecar issuance, as the company makes this a core arrangement providing retrocesssional reinsurance capital support for its Asia Pacific catastrophe underwriting business.

The notes issued by Phoenix 2 Re Pte. Ltd. have been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance-related securities

You can read about this new MS Amlin sidecar transaction, alongside many other reinsurance sidecar investments and related transactions in our directory of collateralized reinsurance sidecars.

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