Clifford Chance

Clifford Chance advises Pool Re on its third ILS Catastrophe Bond

Global law firm Clifford Chance has advised Pool Re, the UK's state-backed terrorism reinsurer, on its third insurance-linked security (ILS) catastrophe bond, providing Pool Re with £100 million of UK terrorism risk cover. The bonds offer collateralised retrocession protection and replace Pool Re's inaugural Rule 144A cat bond issuance maturing this year. The bonds were issued though a UK-domiciled special-purpose vehicle, Baltic PCC Ltd.

The bonds bring new sources of capital to the terrorism risk market and form part of Pool Re's broader strategy of insulating UK taxpayers even further from the financial impacts of catastrophic terror events by facilitating broader risk-sharing within the private sector. The bonds priced at 5.90 percent and the issuance significantly expanded the investor base as compared to prior issuances, reflective of the growing interest in the cat bond market.

Partner Will Winterton commented: "This issuance is another significant milestone in expanding the investor base for terrorism risk, showcasing the complementary support that the capital markets can provide to traditional markets for those wishing to distribute insurance risk."

The Clifford Chance team comprised of partner Will Winterton, alongside senior associate Brij Patel, and associate William Andrews. The team was supported by partner Cheng Li Yow and senior associate Nancy Li in corporate, capital markets partner Gareth Old, and partner Chris Davies and associate Stefaniya Yakubova in tax.