Pool Re’s Chief Executive Officer (CEO) Tom Clementi said the company is pleased to see a record number of global institutional investors participating in the successful placement of the organisation’s third terrorism catastrophe bond, the £100 million Baltic PCC Limited (Series 2025-1) issuance.
The UK government-backed mutual terrorism reinsurance facility returned to the catastrophe bond market in March with its third deal seeking £100 million or more in retrocessional protection from its latest terrorism catastrophe bond from a second renewal of its landmark Baltic PCC terror catastrophe bond.In our first update on the deal, we reported that the size target had not changed, but the price guidance had been adjusted into the upper-half of the initial range.
Then, in late March, we reported that Pool Re had managed to secure its targeted £100 million of retrocessional protection from its third terrorism catastrophe bond.
Issued through UK-domiciled special purpose vehicle Baltic PCC Limited, the transaction will provide Pool Re with £100 million of collateralised retrocession protection and replaces its recently matured Baltic PCC Limited (Series 2022-1) deal.
The UK £100 million tranche of Baltic PCC 2025-1 terror cat bond notes were first offered to cat bond investors with initial price guidance in a range from 5.5% to 6%, which was then fixed in the upper-half of the range for a spread of 5.9%, and this is where the cat bond was eventually priced.
Pool Re noted that this new Baltic PCC Limited (Series 2025-1) issuance strengthens the company’s commitment towards its mission of protecting UK taxpayers from the financial consequences of terror events, by enabling broader risk-sharing within the private sector.
Aon Securities Limited, the capital markets and investment banking arm of the insurance and reinsurance broker, and Howden Capital Markets & Advisory (HCMA), acted as Structuring Agents and Joint Bookrunners for the transaction, with Clifford Chance acting as Legal Counsel.
Tom Clementi, Chief Executive Officer of Pool Re, commented: “We are committed to reducing the financial burden on UK taxpayers and strengthening national economic resilience through increased private-sector participation in the UK terrorism market. As such, we are delighted to have successfully closed our third Cat Bond issuance.”
He continued: “At Pool Re, we continue to lead the way in raising awareness and encouraging the development of terrorism-focused ILS solutions, and we are pleased to see a record number of global institutional investors participating in this transaction. We are also grateful to Moody’s, as the independent risk modeller on this placement, for providing investors with a comprehensive view of risk using the latest Moody’s RMS terrorism model.”
Jordan Brown, Managing Director of Aon Securities, said: “Aon Securities is honoured to have partnered with Pool Re in bringing this successful transaction to the ILS market. We are delighted with the response from the global investor base which is a testament to Pool Re and their team; new investors participated in the offering for the first time, expanding Pool Re’s access to a stable and diverse source of capital and to align with its mission of ceding more risk to the private sector.”
Philipp Kusche, Chairman of Howden Capital Markets & Advisory (HCMA) Europe and Co-Head of Global ILS, added: “HCMA is proud to support Pool Re in their efforts to re-enter the Cat Bond market and one of the defining features of this issuance was Pool Re’s holistic and comprehensive marketing efforts. These initiatives aimed to educate potential investors demystifying the nuances of this unique segment and Pool Re successfully attracted numerous additional investors supporting its panel. The focused educational campaign not only facilitated the success of this Cat Bond but also laid the groundwork for potential future issuances.”
As a reminder, you can read all about this Baltic PCC Limited (Series 2025-1) issuance, and every other catastrophe bond transaction since the market began in the Artemis Deal Directory.
