Further extension for $101m of Hannover Re’s Seaside Re private cat bonds

Extensions of maturity dates continue for $101.25 million of the 2020, 2021, and 2022 vintage Seaside Re private catastrophe bond transactions, allowing for ongoing development of catastrophe loss events that they are potentially exposed to.

In recent months, there have been repeat extensions of maturity for some of the Seaside Re private catastrophe bond transactions, that were issued by German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd.

Almost $159 million of Seaside Re private cat bonds had their maturity dates extended back in December 2022.

$39 million of the extended 2022 vintage Seaside Re catastrophe bonds were later allowed to mature, presumably as it was deemed they were not going to face any losses from the catastrophe events that they were exposed to.

That left $119.75 million of Seaside Re private cat bonds, across 2020, 2021, and 2022 vintages, still extended and presumably still exposed to possible losses, while one of the 2022 series was allowed to mature.

As a result, $109.75 million of the Seaside Re cat bonds had their maturity dates extended further through to October 15th 2023, while further development of catastrophe loss events is awaited and greater clarity required before capital can be returned to investors, or any realised losses be paid.

Now, $101.25 million of those remaining Seaside Re cat bonds that had their maturity dates extended, have had them extended out a further three months, to January 15th 2024, detailed below:

One series, the $8.5 million of Seaside Re (Series 2022-41) private cat bond notes, has not been extended this time around, which suggests these notes could now mature on schedule on October 15th.

The remaining $101.25 million of still extended 2020, 2021, and 2022 vintage Seaside Re private cat bonds now have their maturity dates aligned with those of the 2023 vintage deals.

For the Series 2022 private cat bond tranches from Hannover Re’s Seaside Re program, we make the assumption that they are at-risk of potential losses related to hurricane Ian, given that was the largest catastrophe loss event of the last year and continues to develop.

For the remaining 2020 and 2021 vintage Seaside Re private cat bonds, these are assumed to be exposed to catastrophe losses from their respective years of issuance, given almost every Seaside Re cat bond has provided reinsurance or retro coverage across a single year risk period at the most.

Hannover Re is one of the most important facilitators in the catastrophe bond market, helping investors access reinsurance related returns in securitized form, and ceding clients to access the capital markets.

The reinsurer acts as a risk transformer and facilitator for 144A cat bonds, private catastrophe bonds and other insurance-linked securities (ILS).

In 2022, Hannover Re’s Kaith Re vehicle brought nine Seaside Re private catastrophe bond tranches to market, totalling $108.5 million of risk transferred and securitized, as well as one LI Re private cat bond which transferred $15 million of California earthquake risk.

In 2023 to-date, Hannover Re’s Kaith Re vehicle has issued four Seaside Re private cat bonds, for $49 million of risk capital.

According to Artemis’ extensive data on the catastrophe bond market, private cat bond issuance reached just under $396 million for the first nine months of 2023.

Details of every private catastrophe bond we’ve tracked can be found in our Deal Directory, which you can filter by type of transaction making it easier to view only private cat bond issuances.

View our chart that breaks down issuance of catastrophe bonds by year and type, so you can analyse private cat bond issuance by year.