Tokio Marine redeems all $200m of its Kizuna Re II 2018 cat bond

Tokio Marine redeems all $200m of its Kizuna Re II 2018 cat bond

A fortnight ago we reported that Japanese insurance group Tokio Marine was set to redeem a $150 million tranche of its Kizuna Re II Ltd. (Series 2018-1) Japan earthquake focused catastrophe bond, as the notes had not faced any loss occasions in the three years considering that their issue.That would have left a $50 million Class B tranche of notes still in-force up until April 2023.
It turns out we hadnt heard the full story at the time and were now told that Tokio Marine has decided to redeem the full $200 million of the disaster bond, so both the Class A and B tranches of notes.
At the time of issuance of the 2018 cat bond, we had reported that sponsor Tokio Marine & & Nichido Fire Insurance Co. Ltd. would have an alternative to redeem the notes early, if no qualifying loss event took place in the very first aggregate risk duration, or if a certifying event failed to set off a reinsurance payout.
Tokio Marines catastrophe bond backed reinsurance protection from all of its current concerns is structured on a three-year aggregate basis, across a five-year offer term.
Having this redemption option detailed in the terms of the disaster bond indicates 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.
Now, the very first three-year aggregate risk period for the Kizuna Re II 2018 catastrophe bond is up and the sponsor has actually chosen to redeem the full transaction.
As a reminder, Tokio Marine recently went back to the catastrophe bond market and sponsored a fresh $150 million feline bond issuance, protecting additional reinsurance through the Kizuna Re III Pte. Ltd. (Series 2021-1) transaction that was released last month.
With the $200 million of notes from the Kizuna Re II 2018 feline bond now redeemed, it appears Tokio Marines feline bond backed reinsurance protection has actually shrunk this year.
Were told that the redemption and return of capital to investors from the Kizuna Re II 2018 feline bond has actually currently taken place and its most likely a number of those investors will have reallocated to its brand-new 2021 cat bond deal.

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