The world’s oldest insurance coverage and reinsurance market, Lloyd’s, has confirmed the issuance of the primary 144A disaster bond transaction through London Bridge 2 PCC Limited, the Beazley sponsored $100 million transaction.
The re/insurer opted to access the capital markets by the Lloyd’s owned UK primarily based insurance-linked securities (ILS) construction, London Bridge 2 PCC Limited, which was sponsored by Lloyd’s as a part of its Future at Lloyd’s technique.
Beazley sponsored the transaction on behalf of its Lloyd’s syndicates 623, 2623, and 3623, in addition to its North American insurer, Beazley Excess and Surplus Inc., and its European arm, Beazley Insurance DAC.
The transaction, which is the primary excess-of-loss disaster bond deal to be issued through London Bridge 2 PCC Limited, gives $100 million of multi-year, indemnity reinsurance safety for named storm and earthquake occasions within the U.S., Canada, and components of the Caribbean.
Lloyd’s states that this transaction brings the mixture issuance of securities to institutional traders by the London Bridge autos to roughly $750 million, throughout 13 cells.
This $100 million property cat bond issuance from Beazley got here quickly after the agency’s first full 144a cyber disaster bond, which the provider sponsored after three non-public placements earlier in 2023.
Burkhard Keese, Lloyd’s Chief Financial Officer, commented: “We are more than happy to see the environment friendly shut of the primary extra of loss cat bond transaction by London Bridge 2. This is one other necessary milestone for this strategically necessary threat transformation automobile for the Lloyd’s market and reaffirms the pliability this automobile has, offered by its regulatory permissions. We are delighted that Beazley has been the pioneer for this new issuance, which confirms our perception that the UK market, and Lloyd’s specifically, is a superb place for institutional traders to achieve access to international (re)insurance coverage threat.
Adrian Cox, CEO of Beazley, stated: “Beazley is delighted to be sponsoring the first 144A property catastrophe bond utilising the London Bridge platform. We were impressed with the smooth and efficient way that an ILS transaction can be issued out of the UK market and we are grateful for the support received from Lloyd’s and Artex throughout the process.”
Aon Securities LLC, a part of the worldwide re/insurance coverage dealer, was the only structuring and ebook building agent, and Mayer Brown acted as deal counsel for the transaction.
Richard Pennay, CEO ILS of Aon Securities, stated: “We are proud to have acted as sole structuring agent and bookrunner on not only the inaugural excess of loss catastrophe bond by London Bridge 2 but importantly Beazley’s first property catastrophe bond transaction. From a transaction timeline perspective, the use of the UK PCC allowed for a seamless and efficient execution timeline and was well received by the investor community.”
Colin Scagell, Partner at Mayer Brown, added: “On behalf of the Mayer Brown team it was a pleasure to work with Beazley and the rest of the advisers to bring this first-in-kind transaction to market and we hope it offers a roadmap to other sponsors to consider using the London Bridge structure.”
