$14.35m fourth Mangrove Risk Solutions private cat bond from Marsh, GC comes to light

A fourth private catastrophe bond issuance of the year has come to light from Mangrove Risk Solutions Bermuda Ltd., the platform operated by Marsh McLennan and reinsurance broker Guy Carpenter, with a just over $14.35 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-C) placement completed.

Already this year, we have reported on a number of privately issued and placed catastrophe bonds or insurance-linked securities (ILS) that have come to light from the Mangrove Risk Solutions structure.

The first to come from the platform was a $20 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-D) back in July 2024.

It was followed up by a $26.325 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-A) issuance and a $13.2 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-B) issuance, that both came to light later that same month.

Now, the missing Series 2024-C issuance has come to light, with $14,352,720 of zero-coupon notes having been issued and privately placed with qualified investors.

Mangrove Risk Solutions Bermuda Ltd. emerged as a new private ILS and cat bond lite platform earlier this year, when Marsh renamed its longer-standing private cat bond platform Isosceles Insurance Ltd.

Mangrove Risk Solutions is a Class 3 Bermuda registered insurance company that can be used for issuance of private catastrophe bonds and other insurance-linked securities (ILS) offerings, having been originally launched by Marsh McLennan with its reinsurance broker Guy Carpenter as Isosceles Re back in 2020.

As a platform for the private issuance of series of insurance-linked securities (ILS), Mangrove Risk Solutions makes issuance of 4(2) or 4(a)(2) securities more simple, and efficient for cedents or those wanting to transform reinsurance risks into securities, which are the typical formats for private catastrophe bonds.

Mangrove Risk Solutions is an ILS focused platform through which Marsh McLennan and Guy Carpenter can help their clients gain access to sources of capital markets reinsurance capacity, and also facilitate the transformation and securitization of reinsurance deals for ILS fund managers and investors.

Since this structure became active in issuing private catastrophe bond notes, we had tracked over $317 million in issuance under the Isosceles name and now we are at almost $78.8 million issued under Mangrove Risk Solutions.

You can filter our Deal Directory to view only private catastrophe bonds and you can also analyse private cat bond issuance by year using our interactive chart.

This latest private cat bond or ILS issued by Mangrove Risk Solutions Bermuda Ltd. is a Series 2024-C transaction.

Mangrove Risk Solutions Bermuda Ltd. has issued just over $14.35 million of discounted zero-coupon notes, on behalf of a segregated account 2024-C, with the notes sold to provide an investment for the collateral that underpins a reinsurance or retrocession agreement.

The $14.35 million of notes issued are due for maturity on June 13th 2025, suggesting this transaction provides reinsurance or retrocessional coverage for a term of under one-year. It may be related to a mid-year reinsurance renewal deal that has been transformed and securitized and just took time to come to market, or it may be a more recently placed reinsurance deal that runs for less than one year, we can’t be sure.

As with every private ILS or cat bond deal, until we learn more details we assume these cover property catastrophe reinsurance or retrocession risks.

With private cat bonds, sometimes the risks will have been transformed to enable an ILS fund or investor to source an asset that meets a catastrophe bond mandate, so a transformation from a traditional reinsurance or retro contract. Or, simply, so a cedant can access capital market investors for protection in a more efficient manner than undertaking a full 144A cat bond issuance process.

Private ILS or cat bond lite arrangements normally fit into one of a number of use-cases. Either as a straight collateralised reinsurance or retro cover for a carrier, that has been transformed and securitised, to be assumed by a single ILS fund or investor, or a small group of funds/investors.

Or, they can also represent ILS fund-to-fund transactions (hedging), or the transformation of a specific risk transfer arrangement, such as an industry-loss warranty (ILW).

Reinsurance broker Guy Carpenter’s specialist capital markets unit GC Securities will have structured the transaction and acted as a bookrunner for this Mangrove Risk Solutions private ILS transaction, while Marsh Management Services will have acted as the insurance manager for the vehicle itself, as has been seen with all the previous issuances under the Isosceles name.

Being a Bermuda vehicle, the notes have been listed on the Bermuda Stock Exchange (BSX), which is again an enhancement for liquidity.

With this latest $14.35 million private catastrophe bond from Mangrove Risk Solutions, private cat bond and ILS issuance tracked by Artemis has now reached $411.52 million for the year so far.

You can analyse private cat bond issuance by year in our chart that breaks down all our tracked issuance by type here.

2017 remains the record year for private cat bonds that we have tracked, at just over $1.12 billion of issuance recorded by Artemis.

Read more about this new Mangrove Risk Solutions Bermuda Ltd. (Series 2024-C)  issuance of private catastrophe bonds in our extensive cat bond Deal Directory.

You can filter our Deal Directory to view only private cat bond deals.