Lloyd’s announces first 144A catastrophe bond on London Bridge

Beazley is the sponsor of the US$100m transaction, on behalf of its Lloyd’s syndicates (623, 2623 and 3623), its North American insurance company (Beazley Excess and Surplus Inc.) and European carrier (Beazley Insurance DAC)...

The indemnity reinsurance coverage provides multi-year protection for named storm and earthquake events affecting the United States, Canada and parts of the Caribbean.

The transaction brings the aggregate issuance of securities to institutional investors by the London Bridge vehicles to approximately US$750 million, across 13 cells.

Aon Securities LLC (“Aon Securities”) was the sole structuring and book building agent and Mayer Brown acted as deal counsel for the transaction.

Burkhard Keese, Lloyd’s Chief Financial Officer, said: “We are very pleased to see the efficient close of the first excess of loss cat bond transaction by London Bridge 2. This is another important milestone for this strategically important risk transformation vehicle for the Lloyd’s market and reaffirms the flexibility this vehicle has, provided by its regulatory permissions. We are delighted that Beazley has been the pioneer for this new issuance, which confirms our belief that the UK market, and Lloyd’s in particular, is a great place for institutional investors to gain access to global (re)insurance risk.”

Adrian Cox, CEO of Beazley plc, said: “Beazley is delighted to be sponsoring the first 144A property catastrophe bond utilising the London Bridge platform. We were impressed with the smooth and efficient way that an ILS transaction can be issued out of the UK market and we are grateful for the support received from Lloyd’s and Artex throughout the process.”

Richard Pennay, CEO ILS of Aon Securities, said: “We are proud to have acted as sole structuring agent and bookrunner on not only the inaugural excess of loss catastrophe bond by London Bridge 2 but importantly Beazley’s first property catastrophe bond transaction. From a transaction timeline perspective the use of the UK PCC allowed for a seamless and efficient execution timeline and was well received by the investor community”.

Colin Scagell, Partner at Mayer Brown, said: “On behalf of the Mayer Brown team it was a pleasure to work with Beazley and the rest of the advisers to bring this first-in-kind transaction to market and we hope it offers a roadmap to other sponsors to consider using the London Bridge structure.”