St Peter Port
08 August 2017
Reporter: Becky Butcher

‘First’ blockchain ILS deal done

Dom Re IC, the insurance-linked securities (ILS) reinsurance transformer and incorporated cell of Solidum Re ICC, has issued what it believes to be the first notes to be digitised on a private blockchain.

The ILSBlockchain has replaced the role of a traditional settlement system such as Euroclear or the Depository Trust Company for this note issue, according to Dom Re IC.

The incorporated cell issued $14.8 million in principal-at-risk, participating notes—an asset-backed securitisation of a reinsurance contract—to a total of six investors.

Solidum Re acted as the paying agent and common depository of the permanent global note, as well as the blockchain permission grantor and sponsor.

The investors subscribed for the notes, paying into a Guernsey trust for which Artex Risk Solutions acted as trustee.

On the issue date, the paying agent created cryptographically-certificated notes on the ILSBlockchain and then the investors were able to execute, peer-to-peer with the paying agent, delivery-vs-payment transactions to purchase the newly created notes.

Cedric Edmonds, director of Solidum Re, explained that Dom Re required an alternative to the traditional settlement system because it was becoming “increasingly difficult” to access efficiently for smaller private placement note issues. Mark Helyar, non-executive director of Solidum Re and of counsel at Bedell Cristin, said: “I am delighted that Solidum Re ICC has concluded this latest transaction. It is not an exaggeration to describe the new Dom Re IC structure as a ground breaking, global first, not only for the ILS sector, but for dematerialisation of listed securities generally.”

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