Swiss Re Insurance-Linked Fund Management

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Private cat bond platform Eclipse Re issues $20m deal, its fifth of 2020


Private catastrophe bond transformer and transaction platform Eclipse Re Ltd. has completed its fifth listed insurance-linked securities (ILS) issuance of 2020, with a nearly $20 million Eclipse Re Ltd. (Series 2020-06A) deal that has been privately placed with qualified investors.

EclipseThe Horseshoe managed private syndicated collateralised reinsurance note and private cat bond platform Eclipse Re has now played host to almost $107 million of privately issued and placed catastrophe bond arrangements so far in 2020.

It takes private cat bond issuance for 2020 so far to just over $338 million, according to the privately placed transactions we have listed in our catastrophe bond Deal Directory.

Eclipse Re Ltd. is a Bermuda domiciled special purpose insurer (SPI) and segregated account company, which is utilised to facilitate the issuance of insurance-linked securities (ILS) notes, through the transformation, securitisation and ultimately syndication to investors of reinsurance or retrocession arrangements.

Not every Eclipse Re private catastrophe bond is broadly syndicated though, with a number of issuances from the vehicle having been for the benefit of specialist, cat bond focused ILS fund manager Fermat Capital Management in recent years, acting as the sole investor behind some issuances from the platform.

In this latest Eclipse Re transaction, almost $20 million of Series 2020-06A notes have been issued by the vehicle, with the notes having a final maturity date of September 30th 2021.

That suggests the transaction could have been a top-up reinsurance agreement, or an additional hedge added by a protection buyer, or has at least been entered into outside of the typical reinsurance renewal cycle.

Sometimes the out of renewal cycle deals can be industry loss warranty’s (ILW’s) issued for ILS funds looking to hedge peak perils, such as hurricane risks.

In this case, as with all Eclipse Re private ILS deals, we cannot be sure though, so we just make the assumption these are property catastrophe risk-linked notes, providing an unnamed protection buyer with roughly a year of reinsurance or retrocession.

So, the just slightly under $20 million Series 2020-06A issuance from Eclipse Re, which appears to be a private cat bond or securitisation of a collateralised reinsurance arrangement that runs across a roughly one-year term to September 30th 2021, represents the vehicles segregated account EC0032.

The notes have been placed with qualified investors and admitted to the Bermuda Stock Exchange (BSX) as insurance-related securities for listing, with Horseshoe also acting as listing sponsor through its Horseshoe Corporate Services Limited unit.

The proceeds from the sale of the $20 million of notes will have been put to work as collateral to underpin the related reinsurance or retrocession contracts.

ILS and reinsurance market service provider and facilitator Horseshoe takes the lead as manager for these Eclipse Re transactions, with this special purpose vehicle a key part of its offering to clients.

Platforms like Eclipse Re benefit ILS fund managers and investors by enabling reinsurance or retrocession arrangements to be channelled to them through a risk transformation and securitisation platform like Eclipse Re, with investable notes suited to a more liquid ILS fund strategy the resulting asset.

We’ve added both this new $20 million Eclipse Re Ltd. (Series 2020-06A) private catastrophe bonds to the Artemis Deal Directory.

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