Swiss Re Capital Markets has successfully structured and placed the issuance of USD 250 million of insurance-linked securities issued with respect to certain real estate funds managed or controlled by affiliates of Blackstone Inc. under Wrigley Re Ltd.
This Wrigley Re Ltd. (Series 2023-1) transaction is Blackstone’s first indemnity cat bond and covers named storms and earthquakes in the United States and Canada.
Though, this is not Blackstone’s debut cat bond, that being the $50m Wrigley Re Ltd. (Series 2021-1), which had a parametric trigger and covered California earthquakes.
Jean-Louis Monnier, Head of ILS at Swiss Re, commented, “Swiss Re Capital Markets is proud to have set a milestone with the structuring of Blackstone’s first indemnity issuance.
“This transaction is the result of a collaboration between Blackstone and ILS investors to develop a new solution that fits the challenges of an asset manager and expands the boundaries of the ILS market.
“It is a milestone in the ILS market’s path to realize its potential as an efficient provider of peak peril capacity.”
According to Swiss Re, the deal sets two milestones; it is the first corporate catastrophe bond covering named storms on an indemnity basis, and the first corporate catastrophe bond covering multiple countries.
“This transaction is the first indemnity catastrophe bond by Wrigley Re Ltd. on behalf of Gryphon Mutual Property Americas IC, which acted as insurer for real estate funds managed or controlled by affiliates of Blackstone,” The re/insurer explained.
Swiss Re Capital Markets structured the transaction via two classes of principal at-risk variable rate notes issued by Wrigley Re Ltd., a Bermuda exempted company licensed and registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.
The USD 100 million Series 2023-1 Class A notes provide protection on an indemnity per occurrence basis for named storms in the US and Canada and an indemnity annual aggregate basis for earthquakes in the US excluding California and Canada.
The USD 150 million Series 2023-1 Class B notes provide protection on an indemnity annual aggregate basis for earthquakes in California.
Both classes of notes have a three-year risk period starting July 28, 2023, and introduce an innovative risk-based premium adjustment mechanism to adjust for changes in risk in the covered real estate portfolio.
Swiss Re Capital Markets acted as the sole structuring agent and joint bookrunner.
