Global reinsurance firm Munich Re is seeking investor support for a renewal of its Eden Re II Ltd. fully-collateralized reinsurance sidecar, Artemis understands. Last year Munich Re raised $290 million through the sidecar, but for 2016 the firm is seeking up to $430 million.
According to our sources, Munich Re is looking to secure somewhere in the region of $360 million to $430 million of third-party capital retro reinsurance support through an Eden Re II Series 2016-1 issue.
As we understand it, a Class A tranche of 144A format sidecar notes are being offered to investors with a suggested size from $72.9 million to $142.9 million, while a larger Class B tranche of Eden Re II 2016-1 sidecar notes are also being separately marketed, with a size of $287.1 million. The two tranches are expected to raise the $360-430 million of risk capital between them.
Both Class A and B notes will provide Munich Re with an investor backed source of fully-collateralized multi-peril retrocessional reinsurance protection across a year-long risk period covering the whole of 2016. While the risk period is a year, the notes do not fall due until April 2019 we’re told.
It’s assumed that the sidecar will cover natural catastrophe perils, as the 2015 issuance from the Eden vehicles did, with investors receiving a share of the premiums related to the subject catastrophe reinsurance business.
For 2015 Munich Re used its Bermuda special purpose insurer (SPI) Eden Re II Ltd. to secure $290 million of collateralized capacity, while the reinsurance firm also renewed its Eden Re I Ltd. with a $75 million Series 2015-1 for January 2015.
Munich Re continues to demonstrate its willingness to work with the capital markets on its sidecar program, with this latest Eden Re II looking set to be the largest single capitalisation since it began using the Eden Re collateralized reinsurance sidecar series.
We understand that Deutsche Bank Securities is working on this reinsurance sidecar capital raise for Munich Re. We’ll update you as and when anymore information emerges.
For more details on reinsurance sidecar investments view our list of collateralized reinsurance sidecars.