Reinsurance giant Munich Re has increased the size of its Eden Re II Ltd. fully collateralised sidecar vehicle to $300 million for 2019, the same amount of capital markets backed retrocessional reinsurance support the reinsurer received through the sidecar vehicle last year.
Munich Re returned to the capital markets in December 2018 with the sponsorship and placement of an almost $86.8 million tranche of Series 2019-1 Class A participating notes from its Eden Re II Ltd. sidecar vehicle.
Munich Re has been accessing the capital markets for retrocessional reinsurance protection and sharing its underwriting returns with ILS investors through its Eden Re named collateralised sidecar vehicles since 2014, since which time it has ceded over $2 billion of risk (all detailed in our Reinsurance Sidecar Transaction Directory).
For 2019 the reinsurer began with the smaller $86.8 million tranche of notes, but has now returned to upsize the sidecar to $300 million once again.
In this second Eden Re II transaction for 2019, Munich Re’s vehicle issued an almost $213.3 million tranche of Series 2019-1 Class B participating notes with a due date of March 22nd 2023, acting on behalf of an Eden Re II Segregated Account 2019-1. The notes were listed on the Bermuda Stock Exchange yesterday.
The due date of March 22nd is the same as the 2018-1 issuance a year ago and the 2019-1 Class A tranche issued in December, suggesting this is a renewal of the annual arrangement, likely covering a similar layer of Munich Re’s property catastrophe book.
Munich Re’s sidecar issuances began the same way a year ago, with a smaller first tranche followed up by a larger tranche that took the 2018 Eden Re II issues to around $300 million.
Munich Re accesses the capital markets through another vehicle as well, in private bilateral sidecar deals with Dutch pension investor PGGM.
For 2019 this Leo Re transaction with PGGM amounted to another $400 million of collateralised protection for Munich Re, taking its total sidecar style protection to $700 million for 2019, including Eden Re II.
The Eden Re collateralised reinsurance sidecar series features co-mingled institutional investors supporting Munich Re’s reinsurance underwriting via specific retrocessional cessions, taking a quota share of the subject business from the reinsurer. The Leo Re sidecar sees PGGM accessing similar business but on a private basis, almost a fund-of-one.
Read our previous articles on Munich Re’s Eden Re II Ltd. collateralised reinsurance sidecar.
For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.