A third privately marketed and placed catastrophe bond transaction is being issued through Oak Leaf Re Ltd., a Bermuda domiciled special purpose insurer according to the market. The transaction, Oak Leaf Re Ltd. (Series 2013-1), is seeking a source of fully-collateralized, indemnity based reinsurance protection from Florida hurricanes for a homeowners insurer in the state, a very similar transaction to the 2011 and 2012 issuances by the same SPI.
The deal is being marketed privately to investors and Towers Watson Capital Markets (TWCM) is again structuring, arranging and acting as bookrunner on the cat bond transaction, as it did for the other Oak Leaf deals. In July 2011 TWCM arranged the first $11.95m private placement of cat bond notes through the Oak Leaf Re 2011-1 transaction. The sponsor returned to the cat bond market assisted by TWCM in June 2012, doubling the cover it secured from the cat bond market with Oak Leaf Re 2012-1 coming in at $22.78m in size.
The Oak Leaf Re 2013-1 deal sees the amount of cover provided grow again, showing the increasing confidence that the sponsor has in the capital markets as a source of reinsurance as well as perhaps the lure of attractive pricing, and we understand that the transaction is looking to secure up to $36m of cover.
It has been reported that the sponsor of the Oak Leaf Re cat bonds is Florida based homeowners insurer Southern Oak Insurance Company. That reflects the rumours in the market after the 2012 deals, however we have no way of confirming the sponsors identity yet.
Sources tell us that this is again a one-year transaction, which is perhaps a little surprising considering it is the third deal in the series. Given the reduction in cat bond pricing in 2013 it would seem prudent to aim for multi-year cat bond cover to lock in pricing while rates are at record lows.
We hope to bring you more information on this third Oak Leaf Re catastrophe bond once the transaction has completed. The Oak Leaf Re Ltd. (Series 2013-1) cat bond details have been added to our Deal Directory and we will update the details as more information becomes available.