Nakama Re cat bond doubles in size to $300m for Zenkyoren


The latest Japanese earthquake catastrophe bond to come to market for Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, has doubled in size due to investor demand. Nakama Re Ltd. (Series 2013-1) launched at $150m in size but is expected to close offering $300m of protection to Zenkyoren.

Nakama Re is the first indemnity cat bond that Zenkyoren has issued, its previous cat bonds always being parametric triggered. This Series 2013-1 issuance will secure Zenkyoren a fully-collateralized source of reinsurance cover for earthquakes across Japan and its islands including for tidal wave, fire, flood and sprinkler damage caused by earthquakes.

When it launched, the Nakama Re cat bond had a preliminary size of $150m, in a single tranche of Series 2013-1 notes to provide Zenkyoren with protection on a per occurrence basis and indemnity trigger basis over a three-year risk period. Due to investor demand, similar to most other cat bonds this year, the Nakama Re offering has doubled in size to now offer $300m of notes for sale to capital market investors.

The Nakama Re cat bond launched offering investors an expected coupon in the range of 2.5% to 3%. Latest reports suggest that pricing has now settled at the mid-point of that marketed range, at 2.75%. The cat bond has a high attachment point and the low coupon reflects the remote risk in this Japanese quake transaction.

The Nakama Re Ltd. (Series 2013-1) catastrophe bond is expected to receive its finalised pricing early this week and to fully complete by Friday. You can read all about Nakama Re in our catastrophe bond Deal Directory.

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