Korean Re enters cat bond market with $75m Solomon Re US multi-peril deal

Korean Re, the global reinsurance company headquartered in the country of its name, is the latest debut catastrophe bond sponsor to enter the market in 2023, seeking $75 million or more in US multi-peril catastrophe retrocession with a Solomon Re Ltd. (Series 2023-1) issuance.

It’s further evidence of how attractive the catastrophe bond market is for those seeking reinsurance and retrocession at this stage of the year, with market conditions encouraging yet another new sponsor to venture forwards with its debut cat bond deal.

Korean Reinsurance Company has established a Bermuda based company, Solomon Re Ltd., for the issuance of series of catastrophe bonds, sources told Artemis.

For its first, Solomon Re Ltd. will issue a single, currently $75 million tranche of Series 2023-1 Class A notes, that will be sold to investors and the proceeds used to collateralize a retrocession agreement between the issuer and Korean Re itself.

The protection will be against certain losses from US named storms and earthquakes, over a three-year term to the end of May 2026, we’re told.

The Solomon Re 2023-1 cat bond will provide Korean Re with per-occurrence retro coverage, structured on an industry loss trigger basis.

The coverage spans a layer from an equivalent attachment of $110 million and exhausts at $285 million of Koren Re’s reinsurance tower, we’re told.

That gives the $75 million or more in Series 2023-1 Class A notes that Solomon Re Ltd. will issue an initial attachment probability of 2.22%, an initial expected loss of 0.93% and the notes are being offered to cat bond investors with spread guidance priced in a range from 5.25% to 6%, we’ve learned.

Cat bond deals are coming thick and fast now and already June is shaping up to be another strong month of issuance.

You can read all about this Solomon Re Ltd. (Series 2023-1) catastrophe bond from Korean Re and every cat bond transaction ever issued in the extensive Artemis Deal Directory.