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Hong Kong headquartered global reinsurance company Peak Re is back in the catastrophe bond market, with a target to secure $50 million or more in retrocession from this Black Kite Re Limited (Series 2025-1) issuance across a broader range of perils than its first cat bond covered.
Peak Re’s debut catastrophe bond in 2022 secured the company $150 million of Japanese typhoon retrocession on an industry-loss trigger basis from the Black Kite Re Limited (Series 2022-1) deal.
It was the first Rule 144A catastrophe bond to be issued out of Hong Kong at the time and it’s encouraging to see Peak Re returning to use that domicile for issuance again.
But, more encouraging is the fact Peak Re is looking to source much broader retrocessional catastrophe reinsurance protection with its second Black Kite Re cat bond deal, with an expansion across more countries and perils in Asia for the coverage it is seeking this time around.
For its second Black Kite Re cat bond, Peak Re is seeking industry-loss trigger protection against losses from both Japanese earthquake and typhoon risks, so an expansion of the perils covered within Japan.
But, in addition to that and much more encouraging for the continued penetration of the catastrophe bond market into Asia, Peak Re is also seeking parametric protection against earthquake losses in China and India with this new deal.
Parametric earthquake risk in India is an entirely new peril to the catastrophe bond market, while parametric China quake is a rarely seen risk, so this is good to see and could encourage other potential sponsors to look at ceding risk from those countries in those forms.
We’re told that, Black Kite Re Limited will seek to issue a single tranche of Series 2025-1 Class A notes, that will be sold to investors and the proceeds used to collateralise a retrocessional reinsurance agreement between the issuer and sponsor Peak Reinsurance Company.
The single tranche of notes initially targets at least $50 million of protection for Peak Re, to cover Japanese earthquake and typhoon risks on an industry loss trigger and per-occurrence basis, as well as Chinese and Indian earthquake risks on a parametric basis, all across a three-year period from issuance in late April, sources said.
The Japanese perils attach at an industry loss of $50 billion for earthquake and $15 billion for typhoons, exhausting at $75 billion and $22 billion respectively.
For the parametric China and India earthquake coverage, the trigger uses USGS data and looks for a magnitude exceeding certain levels with parametric boxes that cover each country.
With all this in mind, the currently $50 million of Black Kite Re 2025-1 Class A notes come with a combined initial attachment probability of 5.5%, a combined initial expected loss of 3.78% and are being offered to cat bond investors with spread price guidance in a range from 7.25% to 8%, we understand.
The expansion of the perils underlying this second catastrophe bond from Peak Re is really encouraging to see, as there is significant catastrophe risk exposure in Asian countries that could be ceded through to the insurance-linked securities (ILS) market in time.
As such, this cat bond will prove a useful test of investor appetite for parametric risk in India in particular, as well as in China, plus test the markets appetite for multi-trigger issuances like this, which are currently the best approach to sponsor a catastrophe bond to provide broad Asian coverage.
You can read all about this Black Kite Re Limited (Series 2025-1) catastrophe bond from Peak Re, as well as every other cat bond transaction in our extensive Artemis Deal Directory.
Peak Re adds China / India parametric quake to second Black Kite Re catastrophe bond was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.
This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.
Hong Kong headquartered global reinsurance company Peak Re is back in the catastrophe bond market, with a target to secure $50 million or more in retrocession from this Black Kite Re Limited (Series 2025-1) issuance across a broader range of perils than its first cat bond covered.
Peak Re’s debut catastrophe bond in 2022 secured the company $150 million of Japanese typhoon retrocession on an industry-loss trigger basis from the Black Kite Re Limited (Series 2022-1) deal.
It was the first Rule 144A catastrophe bond to be issued out of Hong Kong at the time and it’s encouraging to see Peak Re returning to use that domicile for issuance again.
But, more encouraging is the fact Peak Re is looking to source much broader retrocessional catastrophe reinsurance protection with its second Black Kite Re cat bond deal, with an expansion across more countries and perils in Asia for the coverage it is seeking this time around.
For its second Black Kite Re cat bond, Peak Re is seeking industry-loss trigger protection against losses from both Japanese earthquake and typhoon risks, so an expansion of the perils covered within Japan.
But, in addition to that and much more encouraging for the continued penetration of the catastrophe bond market into Asia, Peak Re is also seeking parametric protection against earthquake losses in China and India with this new deal.
Parametric earthquake risk in India is an entirely new peril to the catastrophe bond market, while parametric China quake is a rarely seen risk, so this is good to see and could encourage other potential sponsors to look at ceding risk from those countries in those forms.
We’re told that, Black Kite Re Limited will seek to issue a single tranche of Series 2025-1 Class A notes, that will be sold to investors and the proceeds used to collateralise a retrocessional reinsurance agreement between the issuer and sponsor Peak Reinsurance Company.
The single tranche of notes initially targets at least $50 million of protection for Peak Re, to cover Japanese earthquake and typhoon risks on an industry loss trigger and per-occurrence basis, as well as Chinese and Indian earthquake risks on a parametric basis, all across a three-year period from issuance in late April, sources said.
The Japanese perils attach at an industry loss of $50 billion for earthquake and $15 billion for typhoons, exhausting at $75 billion and $22 billion respectively.
For the parametric China and India earthquake coverage, the trigger uses USGS data and looks for a magnitude exceeding certain levels with parametric boxes that cover each country.
With all this in mind, the currently $50 million of Black Kite Re 2025-1 Class A notes come with a combined initial attachment probability of 5.5%, a combined initial expected loss of 3.78% and are being offered to cat bond investors with spread price guidance in a range from 7.25% to 8%, we understand.
The expansion of the perils underlying this second catastrophe bond from Peak Re is really encouraging to see, as there is significant catastrophe risk exposure in Asian countries that could be ceded through to the insurance-linked securities (ILS) market in time.
As such, this cat bond will prove a useful test of investor appetite for parametric risk in India in particular, as well as in China, plus test the markets appetite for multi-trigger issuances like this, which are currently the best approach to sponsor a catastrophe bond to provide broad Asian coverage.
You can read all about this Black Kite Re Limited (Series 2025-1) catastrophe bond from Peak Re, as well as every other cat bond transaction in our extensive Artemis Deal Directory.
Peak Re adds China / India parametric quake to second Black Kite Re catastrophe bond was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.
