The seventh and largest of the Oak Leaf Re catastrophe bond deals has just been announced as completed, a $53.995 million Oak Leaf Re Ltd. (Series 2017-1) which has been structured and placed by the Jardine Lloyd Thompson Capital Markets (JLTCM) team, for sponsor Southern Oak Insurance Company.
Southern Oak has now become one of the most regular users of the catastrophe bond market, opting for seven transactions in a row with one year terms amounting $269.85 million issued, reflecting its clear appetite for securing capital markets backed reinsurance coverage as part of its June renewal.
This seventh transaction saw JLTCM helping Southern Oak to $53.995 million of fully-collateralized reinsurance protection, through an Oak Leaf Re 2017-1 issuance that featured four tranches of ILS notes which were sold to investors.
The Oak Leaf Re 2017-1 privately placed cat bond will provide sponsor Southern Oak with a one year indemnity-based source of collateralized protection, providing it with reinsurance coverage for its book of business. We’re assuming this is a Florida named storm cat bond, as the other Oak Leaf Re’s have been.
The transaction has been structured in four classes of notes, with one a multi-section tranche covering both severity and frequency, while another tranche offers the sponsor a source of reinstatement premium protection (RPP).
“We are greatly enthused that Oak Leaf was once again placed with a strong syndicate through an efficient process. Our client has greatly benefited from enduring relationships with the capital markets,” Rick Miller, Managing Director and Co-Head of Insurance-Linked Securities at Jardine Lloyd Thompson Capital Markets, said.
“In 2017, we are pleased to close our seventh annual Oak Leaf cat bond, which is one of the longer running cat bonds in the marketplace,” added Michael Popkin, Managing Director and Co-Head of Insurance-Linked Securities at Jardine Lloyd Thompson Capital Markets.
Ed Hochberg, CEO of JLT Re North America and JLTCM, commented; “It is a great pleasure to continually diversify the cedent’s sources of capacity by transacting regularly with the capital markets. We are delighted to work closely with Southern Oak and the investors to bring to market the seventh annual Oak Leaf deal.”
The Oak Leaf Re series of transactions began in 2011, with the $11.1m Oak Leaf Re Ltd. (Series 2011-1), followed by the $22.78m Oak Leaf Re Ltd. (Series 2012-1), the $30,49m Oak Leaf Re Ltd. (Series 2013-1), the $44.035m Oak Leaf Re Ltd. (Series 2014-1), the $53.03m Oak Leaf Re Ltd. (Series 2015-1) and last year the $53.575m Oak Leaf Re Ltd. (Series 2016-1).
As a cedent, Southern Oak Insurance has demonstrated its desire to cultivate relationships with ILS investors over now seven annual issuances, with each cat bond deal bigger than the last.
Only a month left until our ILS Asia 2017 conference, tickets on sale here.