Swiss Re places Blackstone’s first indemnity catastrophe bond

Written by Michael Griffiths

20/07/2023

Swiss Re Capital Markets has successfully structured and placed the issuance of $250m of insurance-linked securities issued with respect to certain real estate funds managed or controlled by affiliates of Blackstone, under Wrigley Re.

The transaction marks Blackstone’s first indemnity catastrophe bond and covers named storms and earthquakes in the US and Canada.

Setting two milestones, the deal is the first corporate catastrophe bond covering named storms on an indemnity basis, as well as the first corporate catastrophe bond covering multiple countries.

The transaction is also the first indemnity catastrophe bond by Wrigley Re on behalf of Gryphon Mutual Property Americas IC, which acted as insurer for real estate funds managed or controlled by affiliates of Blackstone.

Swiss Re Capital Markets structured the transaction via two classes of principal at-risk variable rate notes issued by Wrigley Re, a Bermuda exempted company licensed and registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.

The $100m Series 2023-1 Class A notes provide protection on an indemnity per occurrence basis for named storms in the US and Canada and an indemnity annual aggregate basis for earthquakes in the US excluding California and Canada, while the $150m Series 2023-1 Class B notes provide protection on an indemnity annual aggregate basis for earthquakes in California. Both classes of notes have a three-year risk period starting next week on 28 July.

Head of ILS at Swiss Re, Jean-Louis Monnier, commented: “Swiss Re Capital Markets is proud to have set a milestone with the structuring of Blackstone’s first indemnity issuance.

“This transaction is the result of a collaboration between Blackstone and ILS investors to develop a new solution that fits the challenges of an asset manager and expands the boundaries of the ILS market. It is a milestone in the ILS market’s path to realize its potential as an efficient provider of peak peril capacity.”

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