Tokio Marine to redeem $150m of its Kizuna II 2018 cat bond

Tokio Marine to redeem $150m of its Kizuna II 2018 cat bond

Sources have actually told us that Japanese insurance group Tokio Marine has opted to redeem a $150 million tranche of its Kizuna Re II Ltd. (Series 2018-1) Japan earthquake focused disaster bond, as the notes have not faced any loss occasions in the three years since their issue.At the time of the 2018 feline bond being issued, we explained that sponsor Tokio Marine & & Nichido Fire Insurance Co. Ltd. would have a choice to redeem the notes early, no certifying loss event occurred in the very first risk duration, or if a certifying occasion stopped working to activate a reinsurance payout.
Tokio Marines catastrophe bond backed reinsurance defense from all current issues is structured on a three-year aggregate basis, throughout a five-year offer term.
Having this redemption alternative detailed in the regards to the disaster bond means that the sponsor can redeem notes if they havent been called on to supply any reinsurance protection after their very first three-year aggregate period.
Were told that, out of the $200 million Kizuna Re II 2018-1 feline bond issuance only the $150 million tranche of Class A notes are being redeemed early, leaving a riskier $50 million tranche still in-force for the remainder of the offer term, that runs to April 2023.
The redemption and for that reason return of principal to financiers in the $150 million Class A Series 2018-1 tranche of notes released by Kizuna Re II Ltd. need to take place in the next week or so, we understand.
Tokio Marine recently completed a fresh $150 million disaster bond issuance, protecting reinsurance through the Kizuna Re III Pte. Ltd. (Series 2021-1) deal that was issued last month.
Alternatives to redeem cat bonds add versatility for the sponsors in their reinsurance plans, enabling them to lock-in the longer-term protection, but restructure and come back to market to release new bonds ought to it prove appealing and no qualifying losses or reinsurance recoveries under the cat bond notes have happened.

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