France headquartered global reinsurance firm SCOR has returned to London for its latest catastrophe bond, successfully upsizing the multi-peril Atlas Capital UK 2019 PLC (Series 2019-1) transaction to $250 million in the process thanks to strong support from investors.
SCOR was the first company to issuer a catastrophe in the UK under its ILS regulatory regime back in 2018, the $300 million Atlas Capital 2018 transaction.
After that successful issuance the reinsurance firm elected to return to the UK for its latest transaction as well, seeking to add to its retrocessional reinsurance from the capital markets, a strategy that the firm calls a “capital shield policy” and cites as a key strategic axis.
Jean-Paul Conoscente, CEO of SCOR Global P&C, commented on the completion of its latest cat bond, “Having been the first company to successfully sponsor a cat bond under the UK ILS regime in 20182 and continuing its policy of diversifying capital protection tools, SCOR has returned to the London Market to issue Atlas Capital UK 2019. The strength of support for this transaction enabled SCOR to upsize it despite current market conditions – which is reflective of the quality of SCOR’s franchise and reputation as an innovative and long-term sponsor.
“The SCOR team is grateful to the PRA and the other UK regulatory authorities involved for the speed and efficiency they have once again demonstrated in their review and approval of the transaction.”
The transaction completed in the last week and will provide SCOR with a $250 million source of multi-year capital markets backed retrocessional reinsurance protection against losses from U.S. named storms (including Puerto Rico and the U.S. Virgin Islands), U.S. and Canada earthquakes, and European windstorms.
The annual aggregate retro reinsurance protection is provided using industry loss triggers from PCS and PERILS and runs across a four-year term, from June 1st 2019 to May 31st 2023.
SCOR said that the transaction received strong investor support, having priced on May 24th with an 11.75% coupon, slightly above the mid-point of the launch pricing guidance range of 11.25% to 12%.
The reinsurer said that its Atlas Capital 2019 catastrophe bond transaction was approved by the Prudential Regulatory Authority (PRA) and the UK regulatory authorities, while reinsurance broker Guy Carpenter’s investment banking unit GC Securities acted as Sole Structuring Agent, as well as Joint Bookrunner alongside Aon Securities. Legal advice was provided by Clifford Chance.
Including this latest catastrophe bond transaction, SCOR has now completed 16 transactions that have tapped the capital markets for reinsurance and retrocession since 1999, including Atlas cat bonds, Atlas sidecars, mortality bonds and other contingent capital protections.
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