Clifford Chance

Clifford Chance advises Pool Re on its second insurance-linked security cat bond of £100m

Clifford Chance has advised Pool Re, Britain’s state-backed terrorism reinsurer, on its second insurance-linked security (ILS) cat bond of £100m to cover terrorism risk. Issued though a special-purpose vehicle, Baltic PCC Ltd., the notes were issued in a 144A format to enhance liquidity.

The bond will assist our client Pool Re by bringing new sources of capital to the terrorism risk market, returns additional premium to the private sector and moves UK taxpayers even further from the risks which Pool Re mutualises on their behalf. This transaction attracted strong interest from the capital markets which increased the value from £75m issued in 2019 to £100m, and a reduced the risk spread from 5.9% to 5.5%, demonstrating growing expertise and flexibility of the ILS market with respect to a broader spectrum of risks.

The team comprised partner Cheng Li Yow, senior associate Nancy Li and associates Tayyibah Mahmood and Jack Gilbert in corporate, alongside partner Will Winterton and senior associates Brij Patel and Tessa Crook in finance, capital markets partner Gareth Old, and support from senior associate Cameron Dwyer in tax.