Resilience Re Ltd., the private catastrophe bond issuance platform owned and operated by insurance and reinsurance broker Willis Towers Watson, has completed another new issuance, with the placement of a $37 million Resilience Re Ltd. (Series 1861A) transaction.
The Willis Towers Watson Securities operated Resilience Re platform has now been responsible for four private cat bond or ILS transactions so far this year, now totaling $299.6 million of risk capital issued through the four deals in 2018 and this is the tenth transaction in total from the platform that we have listed in our catastrophe bond Deal Directory.
This $37 million Resilience Re 1861A private cat bond is likely a renewal of the also $37 million Resilience Re Ltd. (Series 1761A) which matured recently.
As ever, details are scarce, due to the privately arranged and placed nature of the Resilience Re cat bond offerings, but we can assume the deal covers property catastrophe risks given their prevalence in the insurance-linked securities (ILS) marketplace.
In this latest deal, Resilience Re Ltd. has issued a single $37 million tranche of Series 1861A discounted zero coupon notes, which have been placed with qualified investors and admitted for listing on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities.
The notes are due June 7th 2019, suggesting they cover a one-year reinsurance arrangement from the mid-year renewal.
The discounted zero coupon note structure used in this and other similar private ILS transactions benefits both the sponsor of the cat bond and the investors, as sponsors tend to fund the reinsurance premium up front and investors benefit from a form of leverage. It’s said that these can help to drive keener pricing and enhanced transactional efficiency for both sides.
The sponsor will be benefitting from efficient access to collateralized reinsurance or retrocession cover from the capital markets with this deal, helping to protect it against losses from certain property catastrophe reinsurance exposures.
Willis Towers Watson Securities will have acted as the lead structuring agent and bookrunner for this private cat bond, structuring and facilitating the deal between sponsor and investors, through the transformation of a reinsurance arrangement into a securitised cat bond note with secondary liquidity features.
This transaction will not be fully included in all of our catastrophe bond and ILS market statistics due to the lack of available information.
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