Global law firm Clyde & Co has advised CCR Re on its creation of the first reinsurance sidecar vehicle to be domiciled in France, called 157 Re.
CCR Re will assume a 25% quota share of CCR Re’s worldwide property cat portfolio to provide the reinsurer with fully collateralised capacity to support its organic growth. The insurance-linked securities (ILS) instrument will also provide it with Solvency II regulatory credit and give it access to a new competitive investor base.
The sidecar is due to incept on April 1, 2019 with the expectation that it will recur annually to support CCR Re’s growth on property cat business.
157 Re is the first ever ILS instrument governed by French law and takes the form of a mutual securitisation fund, which has historically been used for financial assets securitisation only.
Commenting on the transaction, Mr Bruno Lemaire, France's Economy Minister, commented in a press release: "The controlled development of alternative reinsurance instruments in France may represent new opportunities for investors as well as for insurance and reinsurance professionals. This successful launch proves this, and once again demonstrates the attractiveness of the Paris financial centre"
Clyde & Co advised CCR Re on matters relating to reinsurance.
The Clyde & Co team advising on the deal was led by Paris based partner Yannis Samothrakis.
Samothrakis commented: "We're delighted to have worked with CCR Re on this innovative project, which is the first of its kind in France and provides a new tool for managing insurance and reinsurance risks efficiently."
157 Re has been licensed by the French supervisory authority, Autorité de Contrôle Prudentiel et de Résolution, and tax authorities have also provided formal guidance in respect of the tax treatment of the operation for the investors.
Willis Towers Watson Securities acted as structuring agent for the transaction, with France Titrisation as the management company, BNP Paribas Securities Services as custodian, Linklaters as transaction counsel.