Terrorism reinsurer Pool Re has completed placement of its second insurance-linked securities (ILS) catastrophe bond, issued through the UK-domiciled special purpose vehicle Baltic PCC Ltd.
This follows the maturing of Pool Re’s original world first issuance in 2019.
The bond increased to £100 million compared to £75 million in 2019, with the risk spread reduced to 5.5 per cent compared to 5.9 per cent under the 2019 issue. Pool Re adds that the 2022 notes were issued in a 144A format to enhance liquidity.
The placement will introduce new sources of capital to the terrorism risk market, as well as return additional premium to the private sector and further mitigates the mutalised risks for UK taxpayers.
Pool Re was formed as the insurance industry’s mutual for insuring terrorism risk in the UK to protect the UK economy, correct market failure, and safeguard society from acts of terrorism by growing the commercial market for terrorism risk and scaling the UK’s resilience to terrorism.
Julian Enoizi, CEO of Pool Re, comments: “This notable achievement demonstrates the continuing innovation and determination of Pool Re in returning a larger part of the risk to the commercial markets and protecting the UK taxpayer consistent with our commitment given as part of our five-year review.
“I am also particularly pleased that we can demonstrate again the collaborative spirit that exists between Pool Re and HM Treasury by supporting the journey towards enhancing the UK’s ILS framework. This will certainly strengthen our industry’s contribution to the UK economy and enhance London’s position in a global industry.”
Ian Coulman, chief investment officer at Pool Re, adds: “We were delighted by the significant interest and appetite from the markets, which has led to an increase in the overall number of investors compared to 2019. This strong interest from the capital markets has led to a reduced spread and increased size of the bond, and is important as we work to bring in new sources of capital to cover terrorism risk reinsurance.”
