Tomoni Re cat bond seeks $240 million in coverage for MS&AD insurers
A new catastrophe bond issue has been launched for the benefit of two Japanese insurance companies owned by MS&AD Insurance Group Holdings, with the transaction Tomoni Re Pte Ltd. (series 2022-1 and 2022-2) to provide sponsors with a multi-year source of Japanese typhoon guaranteed coverage and flood reinsurance.
The ultimate beneficiaries of the reinsurance that the Tomoni Re 2022 catastrophe bond will provide is expected to be Mitsui Sumitomo Insurance Co. Ltd. and Aioi Nissay Dowa Insurance Co., Ltd., both of which were sponsors or beneficiaries of catastrophe bond-backed reinsurance. front guard.
Tomoni Re Pte Ltd. is a newly registered special purpose reinsurance vehicle based in Singapore, as MS&AD continues to leverage the country as a domicile for catastrophe bond issuance, having sponsored its latest Akibare Re cat bond there.
We understand from sources that this new Tomoni Re catalytic bond is a bit complicated, in terms of some of the structuring decisions made, presumably to try to design the cover to benefit two sponsors with different needs, while matching the reinsurance protection. to their traditional tricks.
Tomoni Re Pte Ltd. will issue two series of notes, a series 2022-1 and a series 2022-2 issue, each series also having two tranches below.
The overall issue size is targeted at $240 million or more, with protection to be granted based on an indemnity trigger and a term of approximately four years through early April 2026. we are told.
The coverage of the four tranches of notes will cover certain losses caused by typhoons and floods in Japan.
Let’s move on to sets and slices, which are a bit more complex than typical cat bonds. The four tranches are currently sized at $60 million each, for a total of $240 million.
A tranche of Class A-1 Notes of Series 2022-1 will provide Mitsui Sumitomo with reinsurance protection per event, have an expected initial loss of 0.38% and we understand that it is offered to catastrophe bond investors with price indications within a range of 1.9% to 2%.
A tranche of Series 2022-1 Class B-1 Notes will provide Aioi Nissay Dowa with event protection, have an expected initial loss of 1.37% and will be offered to investors with a coupon of 2.5% at 2 .75%.
A tranche of Series 2022-2 Class A-2 Notes will provide Mitsui Sumitomo with annual global reinsurance protection, have an expected initial loss of 0.55%, and will be offered with indicative prices of 2.25% to 2 .75%.
Finally, a tranche of Class B-2 Notes of Series 2022-2 will provide Aioi Nissay Dowa with protection on an aggregate basis for two years, will have a two-year initial expected loss of 1.87%, annualized at 0, 93%, and will be offered with coupon tips of 2.75% to 3.25%, we are told.
Thus, this catastrophe bond from Tomoni Re Pte will provide MS&AD Holdings’ insurance companies with broad capital markets reinsurance protection against losses caused by typhoons and floods in Japan.
You can find out all about this new catastrophe bond from Tomoni Re Pte Ltd. (series 2022-1 and 2022-2) and all other catastrophe bond deals ever issued in the extensive Artemis Deal Directory.