Peak Reinsurance Company Limited (Peak Re), the Hong Kong headquartered global reinsurer that is majority backed by Fosun International, has renewed its collateralised reinsurance sidecar vehicle Lion Rock Re Ltd. for the third year in succession.
At this stage, we’re not sure about the total size of Peak Re’s reinsurance sidecar renewal for 2021, but a first almost $15.62 million slice of Series 2021-1 notes issued by Lion Rock Re Ltd. has now come to light.
Peak Re’s Lion Rock Re collateralised reinsurance sidecar series of deals provides the reinsurer with access to efficient retrocessional capacity from the capital markets, through an aligned risk sharing arrangement with investors.
Lion Rock Re was the first sidecar structure from an Asian sponsor and with repeated issuances is playing an ongoing and important role for Peak Re, as its business continues to grow and its relationships with insurance-linked securities (ILS) investors continue to expand.
The reinsurer first launched the Lion Rock Re Ltd. Bermuda domiciled sidecar structure in late 2018, with a $75 million issuance that ceded a slice of its global property catastrophe reinsurance book to high-quality global investors in time for the 2019 underwriting year.
Peak Re then renewed the Lion Rock Re sidecar for the 2020 underwriting year, with a $77 million Lion Rock Re II issuance that came to market at the beginning of last year.
After the 2020 issuance, a $12.32 million tranche of notes that were part of the 2020-1 Lion Rock Re issuance were listed on the Bermuda Stock Exchange (BSX), as Peak Re sought to deliver a participation in its sidecar vehicle in the listed format an, or a number of, investors required.
Now, for 2021, Peak Re has been back in the capital markets for a renewal of the Lion Rock Re reinsurance sidecar and the first sign of the issuance is another listed tranche of sidecar notes.
Lion Rock Re Ltd. has issued and listed an almost $15.62 million Series 2021-1 C tranche of participating notes, which have been sold to qualified investors.
The notes, which are due April 1st 2022, will have been sold to investors and the proceeds used to collateralize part of the 2021 quota share retrocessional reinsurance transaction between Peak Re and Lion Rock Re, with the investors gaining a listed note investment asset that carries exposure to the performance of Peak Re’s global property catastrophe reinsurance book.
As with last year’s Lion Rock Re sidecar, we assume there is likely more to come and the overall issuance will have been larger.
We expect that we’ll hear more about the overall Lion Rock Re 2021-1 reinsurance sidecar issuance from Peak Re in the coming days.
Peak Re has been expanding its activities in alternative capital and insurance-linked securities (ILS) in recent years, not least with its acquisition into the ILS fund management market with the creation of Peak Capital.
For details of many reinsurance sidecar investments and transactions over the history of the ILS market, view our comprehensive list of collateralized reinsurance sidecars transactions.