Catastrophe bond a world first for Tise

THE International Stock Exchange has welcomed a world first in the shape of a catastrophe bond listing – with the potential for more in the future.

Mount Merapi spews volcanic materials, seen from Central Java, Indonesia (Muhammad Amin/AP) (30249980)
Mount Merapi spews volcanic materials, seen from Central Java, Indonesia (Muhammad Amin/AP) (30249980)

A Danish Red Cross-sponsored catastrophe bond has listed on the Guernsey-headquartered exchange’s qualified investor bond market as well as being admitted to its sustainable market segment, Tise Sustainable.

Dunant Re IC – an incorporated cell of Replexus ICC (Guernsey) – has issued the first humanitarian catastrophe bond covering pure volcanic eruption. The bonds are settled using Replexus’ blockchain-based insurance linked securities platform, ILSBlox,’

‘It is fantastic to play a part in this world-first issuance, which combines innovative technology and sustainable finance to support the Danish Red Cross in their humanitarian initiatives,’ said Anthony Byrne, head of bond markets at Tise.

‘This demonstrates the growing demand which we are seeing for listings on both the QIBM and Tise Sustainable and I believe that we have the right environment for listing many more similar catastrophe bonds in the future.’

Cedric Edmonds, founder and director at Replexus ICC, said Tise provided a cost-effective and efficient process for the admission of bonds to a recognised stock exchange. This was hugely valued by all those involved in the transaction – including the sponsors, the Danish Red Cross, and the investors – he said.

‘We look forward to facilitating further bond issuances which utilise ILS capacity to support humanitarian work via a listing on Tise,’ he added.

The bond was the first of its kind when issued in March 2021. An initial $3m. was raised through private placement with specialist cat bond investors to cover the risk of 10 volcanic eruptions across three continents.

The 10 volcanoes covered by the CAT bond were selected for the significant humanitarian threat they represent, with at least 700,000 individuals living within 60 miles radius of a potential eruption. They include North America’s second highest volcano, Popocatepetl, Mexico, and Colombia’s Nevado del Ruiz.

The other volcanoes include three in Ecuador (Cotopaxi, Tungurahua and Pichincha), two in Indonesia (Merapi and Raung), one in Chile (Villa Rica), one in Guatemala (Fuego), and one in Cameroon (Mt. Cameroon).

In September, Dunant Re IC became the first insurance entity to be accredited and receive a kitemark under the Guernsey International Insurance Association environmental, social and governance framework.

The listing on Tise of the Dunant Re Series 2021-1, Class VE $3, principal-at-risk, callable, participating notes due 2024 was facilitated by Replexus ICC, which has become a member of Tise to act as a listing agent for bond listings.

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