March 17, 2017
BROOMFIELD, Colo.—ICAT Syndicate 4242 of Lloyd’s of London has successfully sponsored its first catastrophe bond, Buffalo Re Ltd Series 2017-1. The cat bond placement supports indemnity reinsurance coverage from Buffalo Re Ltd. for named storms and earthquakes occurring in the U.S. The coverage is a part of Syndicate 4242’s overall cat reinsurance program that renews on April 1.
With this cat bond issue, ICAT Syndicate 4242 is the first Lloyd’s syndicate since 2002 to act as sole sponsor for a cat bond. ICAT Syndicate 4242 buys a robust reinsurance program of $745 million excess of $40 million per occurrence, with the cat bond supporting $164.5 million of that coverage over a three-year risk period. The bonds were issued in two tranches, with the coverage from the first tranche inuring to the second tranche to provide cascading coverage for multiple events. Final pricing came in at and below the initial launch range, respectively for the Class A and Class B Notes even as the transaction was upsized from the initial $125 million. Willis Capital Markets & Advisory (“WCMA”) served as the sole structuring agent and bookrunner for the bonds.
Megan McConnell, Active Underwriter for ICAT Syndicate 4242 commented: “We are incredibly excited to have completed our first cat bond and to have received such a warm reception from the capital markets. Notwithstanding our already extensive relationships with capital providers, this transaction offers the syndicate additional sources of capacity and fits seamlessly within our overall reinsurance strategy. We are proud to have partnered with Willis Capital Markets & Advisory and their high level of expertise and professionalism has been vital to the successful execution of the transaction.”
Brad Livingston, Vice President of ILS for WCMA commented: “WCMA is proud to have supported ICAT Syndicate 4242 in its inaugural catastrophe bond transaction. Syndicate 4242 has been one of the best performing syndicates over the past ten years and ICAT has a reputation for best in class catastrophe underwriting in the SME market segment. Investors were eager to support the business through Buffalo Re. Buffalo Re provides the syndicate fully collateralized capacity at attractive, stable pricing. We are pleased with the efficiency of the process, not only in minimizing transaction expenses but also in compressing the execution timeline to close in advance of the syndicate’s core reinsurance renewal process. Buffalo Re highlights the benefits and continued ease of execution of fully distributed 144A transactions.”
About ICAT Syndicate 4242
ICAT Syndicate 4242 began underwriting in 2007 with the goal of helping homeowners and business owners in hurricane- and earthquake-prone regions of the United States recover from natural disasters. Business is produced in partnership with select retail agents, wholesale brokers and capital partners.
ICAT Syndicate 4242 is managed by Asta Managing Agency and rated “A” (Excellent) by A.M. Best Company and “A+” (Strong) by Standard & Poor’s. The Syndicate has been a top performer in the Lloyd’s market over its ten years of underwriting at Lloyd’s. Boulder Claims, a subsidiary of ICAT, has successfully managed more than 23,000 claims since its founding in 2005, including those from Hurricanes Charley, Frances, Katrina, Dolly, Ike, Isaac, Sandy and Matthew. For more information, visit usdf21v0780.mrshmc.com.
About Willis Capital Markets & Advisory
Willis Capital Markets & Advisory, with offices in New York, London, Hong Kong and Sydney, provides advice to companies involved in the insurance and reinsurance industry on a broad array of mergers and acquisition transactions as well as capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk and engaging in general capital markets and strategic advisory work. Willis Capital Markets & Advisory (“WCMA”) is a trade name used by Willis Securities, Inc., a licensed broker dealer authorized and regulated by FINRA and a member of SIPC (“WSI”), Willis Capital Markets & Advisory Limited (Registered number 2908053 and ARBN number 604 264 Page 2 of 2 Press Release 557), an investment business authorized and regulated by the UK Financial Conduct Authority (“WCMAL”) and Willis Capital Markets & Advisory (Hong Kong) Limited, a corporation licensed and regulated by the Hong Kong Securities and Futures Commission (“WCMAL (HK)”).
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