The world’s oldest insurance and reinsurance marketplace, Lloyd’s, has confirmed the issuance of the first 144A catastrophe bond transaction via London Bridge 2 PCC Limited, the Beazley sponsored $100 million transaction.
The deal, which is listed in the Artemis Deal Directory, is the first 144A property catastrophe bond sponsored by London-based specialty insurer and reinsurer Beazley.
The re/insurer opted to access the capital markets through the Lloyd’s owned UK based insurance-linked securities (ILS) structure, London Bridge 2 PCC Limited, which was sponsored by Lloyd’s as part of its Future at Lloyd’s strategy.
Beazley sponsored the transaction on behalf of its Lloyd’s syndicates 623, 2623, and 3623, as well as its North American insurer, Beazley Excess and Surplus Inc., and its European arm, Beazley Insurance DAC.
The transaction, which is the first excess-of-loss catastrophe bond deal to be issued via London Bridge 2 PCC Limited, provides $100 million of multi-year, indemnity reinsurance protection for named storm and earthquake events in the U.S., Canada, and parts of the Caribbean.
Lloyd’s states that this transaction brings the aggregate issuance of securities to institutional investors by the London Bridge vehicles to approximately $750 million, across 13 cells.
This $100 million property cat bond issuance from Beazley came soon after the firm’s first full 144a cyber catastrophe bond, which the carrier sponsored after three private placements earlier in 2023.
Burkhard Keese, Lloyd’s Chief Financial Officer, commented: “We are very pleased to see the efficient close of the first excess of loss cat bond transaction by London Bridge 2. This is another important milestone for this strategically important risk transformation vehicle for the Lloyd’s market and reaffirms the flexibility this vehicle has, provided by its regulatory permissions. We are delighted that Beazley has been the pioneer for this new issuance, which confirms our belief that the UK market, and Lloyd’s in particular, is a great place for institutional investors to gain access to global (re)insurance risk.
Adrian Cox, CEO of Beazley, said: “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, part of the global re/insurance broker, was the sole structuring and book building agent, and Mayer Brown acted as deal counsel for the transaction.
Richard Pennay, CEO ILS of Aon Securities, said: “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.”
