Safepoint’s Manatee Re cat bond marked down significantly on Ida loss

Safepoint’s Manatee Re cat bond marked down significantly on Ida loss

Both tranches of Safepoint Insurance Companys most recent catastrophe bond, the $40 million Manatee Re III Pte. Ltd. (Series 2019-1) transaction, have actually now been marked down substantially in the secondary market on possible losses of principal driven by cyclone Idas impacts.Safepoints two tranches of catastrophe bond notes from the Manatee Re III deal supply the insurance company with collateralised reinsurance capacity covering US called storms and extreme thunderstorms throughout the states of Florida, Louisiana, New Jersey & & Texas.
After cyclone Ida struck Louisiana at the start of September, the two tranches of notes had been discounted for possible losses.
To begin, the tranches of notes were only marked down around 20%, suggesting some uncertainty in the cat bond market over how significant its reinsurance healings may be from the cyclone.
Both tranches of notes released through the Manatee Re III cat bond supply Safepoint with $20 million each of per-occurrence indemnity reinsurance defense.
The very first tranche to get marked down further was the Class B layer, which at issuance had an initial predicted loss of 4.23% and sat listed below the less risky Class A notes, that had an expected loss of 1.15%.
The $20 million Class B notes saw their pricing slashed down to quotes of simply 2 to 5 cents on the dollar in some feline bond broker secondary market prices sheets around mid-October, suggesting the marketplace was anticipating the riskier layer of the Manatee Re III cat bond to deal with an overall loss at that time.
Its most likely this followed a loss quote upgrade from the sponsoring insurer Safepoint.
Now, were informed that the secondary market rate for the less dangerous Class A notes, that sit above the Class Bs, have likewise seen their value slashed further in the last week, with some sheets now revealing this tranche at quotes as low as 15 cents.
Which recommends that Safepoints supreme losses from hurricane Ida have now risen to a level that is now anticipated to consume roughly 85% through the upper-layer of the Manatee Re III catastrophe bond offer, indicating an increasing level of reinsurance recoveries for the insurance provider.
At this time it now looks like most of the $40 million Manatee Re III disaster bond will payout to the advantage of Safepoint, contributing to cat bond investor losses from typhoon Ida.
As we described earlier today, loss expectations for Louisiana Citizens disaster bonds have also increased.
You can see information of numerous catastrophe bond defaults and losses in our Directory.

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