Still no maturity for Gator Re, but outstanding principal reduced

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There has still not been a final maturity of the stricken catastrophe bond Gator Re Ltd., as the remaining outstanding notes are extended once again, but maturity does seem to be nearing as the amount of principal outstanding has been reduced to just under $5 million.

The Gator Re 2014-1 catastrophe bond notes have been extended for another month, with their maturity now set for the 9th August 2017.

However, just $4,981,582 of notes now remain outstanding, which is down from the $17.78 million of principal that was extended in June and suggests that some more of the principal has been paid out to the sponsor American Strategic Insurance.

The latest loss estimate, first reported by Artemis back in April, showed that claims from severe thunderstorms events that were covered by the Gator Re cat bond had risen to more than $213.6 million, which given the attachment point had been $175 million meant that the a $35 million retained portion of the collateral principal was almost certain to be paid out to the sponsor American Strategic Insurance.

The sponsor had previously reported that it was making a $29.5 million reinsurance recovery under the Gator Re cat bond, but with the loss estimates having risen beyond the retained level of principal it was anticipated that the full $35 million would eventually be paid out.

With the amount of principal outstanding having fallen again it seems likely that American Strategic is gradually receiving any reinsurance recoveries due under the terms of the Gator Re cat bond transaction.

With just $4,981,582 of notes now extended to the 9th August, it’s possible the cat bond could be matured before a further extension period is required.

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