Silk Road Re cat bond gives Taiping Re $35m of 3-year China quake / US wind retro

We’ve learned a few more details about the new Silk Road Re Limited catastrophe bond transaction that is set to be issued out of Hong Kong, with the notes set to provide sponsor Taiping Reinsurance Company (Taiping Re) with a US $35 million source of three years of retrocessional protection.

Yesterday, we reported that Taiping Re was set to sponsor its first catastrophe bond and that it will become the fourth cat bond to be issued using a Hong Kong domiciles special purpose insurance vehicle.

We’d suggested it would be close to US $32 million in size, needing to clear a hurdle of that amount to be able to benefit from Hong Kong’s insurance-linked securities (ILS) grant scheme.

We’ve now been told by sources that this privately placed cat bond, it is not a 144A deal, has been priced and with that information has come the size, which is said to be US $35 million.

In addition, we’ve learned that the Silk Road Re cat bond notes will provide Taiping Re with a three-year source of multi-peril and multi-territory retro reinsurance, with the coverage running to the end of 2027 and maturity set for early January 2028.

Sources also confirmed that the Silk Road Re cat bond notes will cover both Chinese earthquake risk and certain US perils, as we’d reported, but we’re now told the US peril coverage is for named storm risks.

The trigger details remain the same, as a parametric trigger for the China quake cover and an industry-loss trigger for the US named storm protection.

We’ve also now learned that the US $35 million of notes will pay investors a spread of 6%, having been priced successfully late yesterday.

Finally, we’re told that GC Securities, the insurance-linked securities (ILS) and capital markets investment banking arm of reinsurance broker Guy Carpenter, is the sole structuring agent and bookrunner that helped Taiping Re get its debut catastrophe bond to market.

You can read all about this new Silk Road Re Limited catastrophe bond and details on every other cat bond ever issued in the extensive Artemis Deal Directory.