Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Tralee, a new Kane SAC private ILS or cat bond, lists in Bermuda


A new $17.6m private catastrophe bond or ILS transaction from a segregated account named ‘Tralee‘  has been issued through global independent insurance manager Kane’s private ILS platform, the Kane SAC Limited Note Program.

As with many private ILS or cat bond lite transactions, information is limited at this time. We hope to source additional details in the days to come.

What we do know is that the private ILS transaction involves a named segregated account from the Kane SAC Limited issuance vehicle. The roughly $17.6m of at risk notes that have been issued have a due date of the 20th July 2017, meaning this represents a two-year reinsurance contract.

These segregated account deals issued through the Kane SAC vehicles often relate to quota share reinsurance contracts, with the notes being preference shares issued by the vehicle.

Interestingly, the Tralee segregated account’s at risk notes are denominated in Japanese Yen. This could mean a number of things, perhaps that the transaction covers Japanese perils, that it has been arranged specifically for a Japanese investor, or that it has been arranged for an ILS fund’s JPY denominated share class. It’s not possible to confirm at this time.

The Tralee segregated account notes amount to JPY 2,161,455,130, which converts to just slightly over USD$17.6m. The notes have been admitted for listing on the Bermuda Stock Exchange (BSX).

As with so many of these private deals, Tralee likely involves an ILS fund manager, or reinsurer operated third-party capital unit, underwriting a reinsurance transaction on a fully-collaterallized basis and then using the Kane SAC notes platform to transform it into a liquid, transferable security form.

Given the timing of the issuance of the Tralee transaction, it’s likely that it relates to a July 1st reinsurance renewal contract.

The increasing volume of cat bond lites, private ILS and smaller capital market transactions such as Tralee, shows that investors appetite to access reinsurance risks continues and the increasingly important role that transformation and efficient issuance platforms can play in the market.

We’ve listed the transaction in the Artemis Deal Directory for completeness as Kane SAC Limited – Tralee. We’ll update you if further details come to light.

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