St Peter Port
13 February 2018
Reporter: Ned Holmes

Second cat bond issued on ILSBlockchain

Solidum Partners has issued the second catastrophe bond on ILSBlockchain, a private blockchain set up by their incorporated cell company Solidum Re.

The cat bond contains seven tranches of notes which are peak zone property risks and a mixture of first event, second event and ‘dead cat’.

All of the notes were issued through a single issuer, Solidum Re Jungfrau IC.

The transaction is worth $15 million, bringing the total issued on the ILSBlockchain to nearly $30 million.

In August 2017, Solidum Partners issued the first notes digitised on a private blockchain when Dom Re IC, an incorporated cell of Solidum Re, issued $14.8 million in principal-at-risk, participating notes—an asset-backed securitisation of a reinsurance contract.

According to Cedric Edmonds, partner at Solidum Partners, there has been increased interest in the ILSBlockchain which could lead to more transactions in the future.

He said: “As more issuers get involved we should see more notes on the blockchain which will draw more participants. This will drive up the liquidity of the ‘Cat Bond Lite’ issues on the ILSBlockchain, hopefully turning what has been an illiquid market into at least a market with demonstrable liquidity.”

Edmonds added: “Using the ILSBlockchain has proven simpler, quicker, cheaper for securities settlement than Euroclear. It removes entities from the process which simplifies closing as with less and less counterparties involved, turning documents, document agreement and execution become easier and quicker.”

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