Artex Axcell Re issues ~$4m Japanese private cat bond in Bermuda

A new roughly US $4 million private catastrophe bond has been issued, Artex Axcell Re (Series FE0001), and the notes of the issuance are denominated in Japanese Yen, suggesting it covers catastrophe perils in that country and likely provides a capital markets backed source of reinsurance to an unknown Japanese sponsor.

The private cat bond, or cat bond lite, has been issued by the Artex Axcell Re (Bermuda) Limited transformer and cell facility, which is operated by Artex Risk Solutions and has been regularly used for transacting and issuance of private insurance-linked securities (ILS) arrangements, from collateralized reinsurance to private cat bonds.

Artex Axcell Re (Bermuda) Limited, under its ILS Note Program II, has issued JPY 600 million (roughly US $4 million) in Series FE0001 notes.

The private cat bond notes have a due date of April 28th 2025, so their coverage likely runs into that month, which aligns with some reinsurance arrangements for cedents in Japan.

We understand this private cat bond transaction may actually have been completed some time ago, but has only now come to light when the notes were listed on the Bermuda Stock Exchange (BSX) yesterday.

Given the denomination of the private cat bond notes being in Japanese Yen, we assume they will cover a Japanese peril, likely property catastrophe in nature, for an unknown Japanese sponsor or entity active there.

The JPY 600 million of private cat bond notes were privately placed with qualified institutional investors.

As with all private ILS or cat bond deals that we hear about, until we learn more details we assume these cover a property catastrophe reinsurance or retrocession risk, in this case in Japan.

With private cat bonds, the risks are often transformed to enable an ILS fund or investor to source an asset that meets a catastrophe bond mandate, so converting them from a traditional reinsurance or retro contract to something more suited to cat bond funds.

Or, they can simply be arranged 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 a re/insurer or other entity accessing coverage from the capital markets, with the risks assumed by a single ILS fund or investor, or a small group of funds/investors, or, they can represent ILS fund-to-fund transactions (hedging), or the transformation of a specific risk transfer arrangement, such as an industry-loss warranty (ILW), into a cat bond strategy compatible format.

You can view details on every private cat bond we’ve tracked in the Artemis Catastrophe Bond Deal Directory. Use the filters to view only private cat bonds (filter by type).

You can also track private catastrophe bond issuance by year in this interactive chart.

We’ve added this roughly $4 million Artex Axcell Re (Series FE0001) private cat bond transaction to the Artemis Deal Directory, and what data points we have on the arrangement will be included in our catastrophe bond and ILS market statistics.