Marsh and GC’s Mangrove Risk Solutions issues $39.5m in private cat bonds

Artemis has learned of two new private catastrophe bond issuances from Mangrove Risk Solutions Bermuda Ltd., the platform operated by Marsh McLennan and reinsurance broker Guy Carpenter, with just over $39.5 million in risk capital issued across two zero-coupon transactions.

These two latest private cat bond deals to emerge are a new $26.325 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-A) issuance and also a new $13.2 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-B) issuance.

They come on the heels of a recent $20 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-D) transaction, which as we reported at the time was the first to come from the Mangrove Risk Solutions Bermuda cat bond platform since it was renamed from Isosceles.

Mangrove Risk Solutions Bermuda Ltd. is the new name for the longer-standing private cat bond platform Isosceles Insurance Ltd..

Mangrove Risk Solutions is a Class 3 Bermuda registered insurance company that has been utilised for issuance of private catastrophe bonds and other insurance-linked securities (ILS) offerings over the years, having been originally launched by Marsh McLennan with its reinsurance broker Guy Carpenter as Isosceles Re back in 2020.

As a platform for the private issuance of series of insurance-linked securities (ILS), Mangrove makes issuance of 4(2) or 4(a)(2) securities more simple, which are the typical formats for private catastrophe bonds.

Mangrove Risk Solutions is an ILS focused platform through which Marsh McLennan and Guy Carpenter can help their clients gain access to sources of capital markets reinsurance capacity, and also facilitate the transformation and securitization of reinsurance deals for ILS fund managers and investors.

With these two new private cat bond deals, Mangrove Risk Solutions Bermuda Ltd. has issued $26.325 million of discounted zero-coupon notes, on behalf of a segregated account named 2024-A, and $13.2 million in notes on behalf of a segregated account named 2024-B.

In both cases, the notes have been sold to provide an investment structure for the collateral that underpins a reinsurance or retrocession agreement.

The $just over $39.5 million of notes issued across the two series are due for maturity as of May 16th 2025, suggesting this transaction provides reinsurance or retrocessional coverage for a term of under one-year. As we’ve said before, these could be mid-year reinsurance renewal deals that have been transformed and securitized.

The $39.5 million or so of 2024-A and 2024-B notes are structured as discounted zero coupon participating notes, which is typical of many private ILS transformations of collateralised reinsurance or retrocession contracts, converting them into a more liquid and investable security, usually for a cat bond specific fund or ILS strategy.

As with every private ILS or cat bond deal, until we learn more details we assume these cover property catastrophe reinsurance or retrocession risks.

The maturity date for the 2024-A and 2024-B private cat bond notes is different to the previously seen 2024-D issuance, suggesting they may come from different deals.

As ever, we don’t know the source or use-case, but these can sometimes be for ILS fund managers that are transforming and securitizing private reinsurance deals to fit a cat bond fund mandate.

Or, these could see a cedant transacting directly with capital market investors for protection in a more efficient manner than undertaking a full 144A cat bond issuance process.

These types of private transactions can also represent ILS fund-to-fund transactions (hedging), or the transformation of a specific risk transfer arrangement, such as an industry-loss warranty (ILW).

Reinsurance broker Guy Carpenter’s specialist capital markets unit GC Securities is expected to have structured the transaction and acted as bookrunner for these Mangrove Risk Solutions private ILS notes, while Marsh Management Services will have acted as the insurance manager for the vehicle itself, as has been seen with every previous issuance under the Mangrove and Isosceles names.

As a Bermuda ILS structure, the Mangrove Risk Solutions notes have been listed on the Bermuda Stock Exchange (BSX), which is again an enhancement for liquidity.

With two more million private catastrophe bonds from Mangrove Risk Solutions amounting to just over $39.5 million in risk capital issued, private cat bond issuance tracked by Artemis has now reached almost $323 million for the year so far.

You can analyse private cat bond issuance by year in our chart that breaks down all our tracked issuance by type here.

2017 remains the record year for private cat bonds that we have tracked, at just over $1.12 billion of issuance recorded by Artemis.

Read more about these new Mangrove Risk Solutions Bermuda Ltd. (Series 2024-A) and Mangrove Risk Solutions Bermuda Ltd. (Series 2024-B) private catastrophe bonds in our extensive cat bond Deal Directory.

You can filter our Deal Directory to view only private cat bond deals.