Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Phoenix 1 Re, a Singapore SPRV, in $42.14m private ILS issuance


A new Singapore domiciled insurance-linked securities (ILS) transaction has come to light, after a recently registered Special Purpose Reinsurance Vehicle named Phoenix 1 Re Pte. Ltd. issued and listed almost $42.14 million of private ILS notes.

Singapore skylineAt this stage we’re not sure if the Phoenix 1 Re Pte. Ltd. issuance represents a catastrophe bond, a collateralised reinsurance sidecar, or more simply an issuance of insurance-linked notes through a Singapore SPRV that supports an underlying reinsurance contract.

The issuance was a private placement and we’re erring on the side of it perhaps being a collateralised reinsurance sidecar like structure, offering transferable notes to investors, given the offering was of “participating notes” rather than principal-at-risk notes.

Another factor pointing towards a structure supporting a more sidecar-like transaction, is the fact the privately placed insurance-linked securities (ILS) notes issued by Phoenix 1 Re are relatively long-dated, having a maturity due date of January 4th 2027.

Catastrophe bonds typically aren’t that long-dated, being three to five years on average.

That said, special purpose vehicles have been used to assume quota shares (like a reinsurance sidecar) but issue cat bond fund strategy compatible notes to investors in the past, remember RenRe’s Fibonacci vehicle, so that is also possible.

As a result, at this stage we haven’t included this deal in our catastrophe bond Deal Directory and it won’t be included in our cat bond market charts or our cat bond and ILS market quarterly reports, until we can confirm one way or the other.

We have listed the Phoenix 1 Re Pte. Ltd. private ILS issuance in our reinsurance sidecar transaction directory for the moment.

This offering saw Singapore based special purpose reinsurance vehicle (SPRV) Phoenix 1 Re Pte. Ltd. issuing $42.135 million of Series 2021-1 participating notes, due Jan 4th 2027, with the notes privately placed with unknown investors.

As with any such transaction, we’d assume the notes are linked to certain property catastrophe reinsurance exposures and that the proceeds generated by the private placement and sale of the notes to investors will have been used to collateralize an underlying reinsurance or retrocession agreement, possibly a quota share given the participating nature of the notes.

The $42.135 million of Series 2021-1 participating notes issued by Phoenix 1 Re Pte. Ltd. have been admitted for listing on the Bermuda Stock Exchange (BSX) as insurance-related securities.

It’s encouraging to see the first insurance-linked securities (ILS) offering out of Singapore that isn’t a typical catastrophe bond, as it suggests a broadening of the scope of use of the countries ILS regulatory regime and also suggests other sponsors may follow-suit in using Singapore to connect their risks with the capital markets.

Update: MS Amlin was revealed as the sponsor of this transaction, which is a quota share sidecar and the first such deal to feature only non-peak Asian property catastrophe perils.

As noted, we’ve listed this new Singapore ILS deal alongside reinsurance sidecar investments and other related transactions in our directory of collateralized reinsurance sidecars transactions.

Register today for ILS Asia 2023, our next insurance-linked securities (ILS) market conference. Held in Singapore, July 13th, 2023.

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