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TWIA’s new Alamo Re II cat bond another to shift to Singapore in 2020


The Texas Windstorm Insurance Association’s (TWIA) new catastrophe bond is the latest issuance to have shifted domicile to Singapore, with the special purpose reinsurance vehicle used for the transaction being named Alamo Re II Pte. Ltd.

Singapore skylineThe transaction was launched to the cat bond investment community this week, but we were incorrect in naming the deal Alamo Re II Ltd. it turns out, as we hadn’t been aware at the time that this is destined to be another Singapore domiciled catastrophe bond issuance.

With the catastrophe bond issuance, TWIA is targeting a $200 million source of reinsurance capital through the Alamo Re II Pte. Ltd (Series 2020-1) transaction.

TWIA has joined a number of U.S. based catastrophe bond sponsors to take their latest issuances to Singapore just this month.

Other sponsors with a Singapore domiciled cat bond in the market during May 2020 include Louisiana Citizens Property Insurance Corporation who successfully secured $60 million of reinsurance with the Catahoula Re Pte. Ltd. (Series 2020-1) deal and Avatar Property and Casualty Insurance Company who is targeting $65 million of reinsurance with the recently launched Casablanca Re Pte. Ltd. (Series 2020-1) offering.

TWIA’s move, as the latest sponsor to look to Singapore for catastrophe bond issuance, takes the number of cat bonds issued in the country to five for the year so far, up on the three issued there in 2019.

Four out of the five sponsors of 2020 cat bonds in Singapore are U.S. based, while the other was Japanese.

It’s a reflection of the traction being achieved by Singapore, but of course driven by the lower-cost of issuance thanks to the country’s ILS grant scheme.

In a challenging and hard catastrophe reinsurance market, such as we see today and that is likely to persist into next year, it stands to reason sponsors would look to Singapore, or any domicile that can help to reduce the cost of issuance.

Issuance costs remain a significant expense in the catastrophe bond market and while this persists, any domicile offering incentives to lower the price involved in securitising reinsurance risks and selling them to investors would be expected to gain favour.

View details on every catastrophe bond issued to-date in Singapore in our extensive Artemis Deal Directory.

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