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Resilience Re finalises record private cat bond

Willis Capital Markets & Advisory's private cat bond platform Resilience Re has completed a $187mn deal, its largest transaction so far.

The Series 1712 issuance was made up of three tranches, two of which provided two-year reinsurance cover. The class A and B two-year notes raised $101mn and $35.99mn of limit respectively.

The class C notes raised $49.99mn of one-year cover. Each series of notes was listed on the Bermuda Stock Exchange (BSX).

The broker's Resilience Re platform is designed to take collateralised reinsurance written for a sponsor's traditional reinsurance programme and transform it into note format.

Investors have limited liquidity from the deals, as they are only able to sell on to one of their fellow initial investors. The deals do not feature independent administrators and can be seen as closer to collateralised reinsurance than a 144a cat bond.

The first Resilience Re transaction was a $57mn deal for the California Earthquake Authority (CEA) in December 2015.

On 6 January, cat bond lite volumes for 2017 were pushed ahead of last year's total when Hannover Re's segregated cell platform Kaith Re listed $86.5mn of securities on the BSX.

This took cat bond lite transactions to $273.48mn, including the $187mn Resilience Re club cat bond deal.

The 2017 total has already surpassed the $212.81mn recorded for the whole of 2016.

The latest Kaith Re transaction involved three tranches of securities issued for its segregated account Seaside Re.

The 2017-1 bond was made up of $27mn of securities, while the 2017-2 issuance raised $9.5mn and the 2017-3 series provided $50mn of limit. All are due to mature on 15 January 2018.

Seaside Re is the largest cat bond lite that Hannover Re's Kaith platform has transacted in the past year.

On 9 January, Twelve Capital completed a $19.45mn Dodeka XI cat bond lite deal, according to a BSX listing. Twelve completed three Dodeka deals last July.

Cat bond lites typically involve a single insurance-linked securities fund manager transforming reinsurance deals - often industry loss warranties - into note format to allow them to be allocated to liquid fund strategies.

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