New Black Kite Re cat bond reflects Peak Re’s goal to address Asia’s evolving cat risks: CEO
Peak Re has hailed the structure of its latest catastrophe bond issuance, the $50 million Black Kite Re Limited (Series 2025-1) transaction, a move that the company’s CEO says reflects the firm’s broader mission to address Asia’s evolving catastrophe risks while fostering sustainable growth across the Asia-Pacific region.
The Hong Kong headquartered global reinsurer returned to the catastrophe bond market earlier this month, initially aiming to secure $50 million or more in retrocessional reinsurance from this Black Kite Re 2025-1 deal.
As we reported last week, Peak Re managed to successfully secure the targeted $50 million size, while the pricing of the notes were finalised at the upper-end of the initial guidance.
Issued via Hong Kong-based special purpose insurer (SPI), Black Kite Re, this latest cat bond builds on the success of Peak Re’s debut catastrophe bond from 2022, where the company managed to $150 million of Japanese typhoon retrocession on an industry-loss trigger basis from the Black Kite Re Limited (Series 2022-1) deal.
As we have previously reported, that cat bond transaction is scheduled to mature this coming June, so it appears Peak Re’s cat bond backed retro will decline at that time unless any further issues come to light, given the smaller size of this second Black Kite Re cat bond deal.
Now, with its second cat bond priced, the $50 million Black Kite Re 2025-1 issuance will cover Japanese earthquake and typhoon risks on an industry loss trigger and per-occurrence basis for Peak Re, so an expansion of the Japanese protection, as well as the additional cover for Chinese and Indian earthquake risks on a parametric basis, all across a three-year period from issuance in late April.
“This issuance represents a significant advancement in the use of insurance-linked securities (ILS) to address Asia’s growing catastrophe risks. For the first time, India has been included in a 144A catastrophe bond, expanding risk transfer to one of the region’s fastest growing and most dynamic markets,” Peak Re explained.
At the same time, this Black Kite Re Limited (Series 2025-1) deal also marks the first time that a multi-peril, multi-territory catastrophe bond has been issued by an Asian sponsor from an Asian domicile.
“In addition, it is the first time a Hong Kong Special Purpose Insurer (SPI) has been reused for a second issuance, further highlighting the scalability and maturity of Hong Kong’s ILS framework,” Peak Re added.
Franz-Josef Hahn, CEO of Peak Re, commented: “This transaction underscores our ability to pioneer innovative risk transfer solutions for the Asia-Pacific region. By combining developed markets like Japan with emerging markets such as India and China, we’ve created a unique diversifier that strengthens resilience for our clients and their communities.”
Adding: “We are also proud to contribute to Hong Kong’s establishment as a global hub for ILS issuance and innovation. This bond reflects Peak Re’s broader mission to address Asia’s evolving catastrophe risks while fostering sustainable growth across the region.”
Iain Reynolds, Head of Third-Party Capital at Peak Re, said: “The Black Kite Re 2025-1 bond provides us with a unique structure that combines industry-loss-trigger coverage for Japanese earthquake and typhoon risks with parametric earthquake protection for China and India.
“Its transparency and diversification not only deliver effective risk transfer but also offer a compelling opportunity for investors to participate in Asia’s dynamic catastrophe risk market.”
Sascha Bruns, Head of Global Retrocession at Peak Re, added: “This structure integrates the security of a fully collateralized retrocession with the efficiency and rapid response of parametric triggers, which benefits both Peak Re and ultimately our cedants.”
Furthermore, Guy Carpenter’s capital markets focused GC Securities division, a division of MMC Securities LLC, acted as the structuring agent and bookrunner of the transaction.
In addition, Mercer Investments (HK) Limited acted as a structuring agent and co-manager with respect to qualified Hong Kong investors. Cadwalader, Wickersham & Taft LLP acted as international counsel, and King & Wood Mallesons acted as Hong Kong counsel on the transaction.
As a reminder, you can read all about this Black Kite Re Limited (Series 2025-1) catastrophe bond from Peak Re, as well as every other cat bond transaction in our extensive Artemis Deal Directory.
