Munich Re has again secured a total of over $360 million of capital markets capacity using its Eden Re II Ltd. collateralised reinsurance sidecar vehicle, adding a January listing of $258.7 million of Series 2017-1 Class B notes to its December $101.4 million Class A issuance.
The Eden Re II Ltd. reinsurance sidecar was first used by global player Munich Re in December 2014, as the reinsurer secured $290 million of capital market funding to add to a $75 million Eden Re I Ltd. issuance in the same month.
Then in December 2015 Munich Re used only the Eden Re II vehicle, securing $360 million of third-party investor backing for its sidecar again, as it continued the program that enables the capital markets to participate in its underwriting returns.
For 2017 the reinsurer again has solely used Eden Re II Ltd. with the two series of participating notes totaling roughly $360 million of third-party capacity.
This latest Series 2017-1 Class B issuance listed on the Bermuda Stock Exchange (BSX) last week, with precisely $258.653,050 million of participating notes issued and having a due date of March 22nd 2021, which is the same maturity timeline as the Class A tranche listed in December.
The almost $258.7 million Class B tranche have been placed with qualified investors and listed on the BSX classified as Section V – Insurance Related Securities, with Clarien BSX Services acting as the listing sponsor.
Munich Re benefits from a $360 million pool of collateralised retrocessional reinsurance capacity through its Eden Re II Ltd. 2017 arrangement, augmenting its capital with third-party backed funds and also providing a source of fee income.
The capital market investors backing the Eden Re II sidecar benefit from the ability to follow the underwriting fortunes of one of the world’s largest reinsurance firms, through a vehicle issuing notes listed on an exchange which makes the investments transferable (although we should add that reinsurance sidecar notes do not trade very often, as most investors want to hold for the term.)
More than $1.1 billion of collateralised reinsurance sidecar notes have been issued through December and into January, as reinsurers continue to expand their relationships with insurance-linked securities (ILS) investors and bring third-party capital into their underwriting businesses.
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.