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Bermudan ILS deals set Q2 record

A record number of insurance-linked securities (ILS) were issued in the second quarter, according to the Bermuda Monetary Authority (BMA).

There were 18 bonds issued, with a notional value of $US3.2 billion ($4.6 billion), making it the fourth consecutive year the number of ILS issued in the second quarter has increased.

ILS issued from Bermuda represent 67% of total outstanding ILS capacity.

Although a large number of bonds were issued, the total value of issuances fell 31% due to many smaller deals entering the market, the latest Bermuda ILS Market Report says.

Twelve ILS with a notional value of $US1.7 billion ($2.4 billion) matured during the quarter.

New issuance of ILS increased 55% compared with the preceding quarter. The authority says this is consistent with market trends since 2009, because the second quarter is typically the most active period before the Atlantic hurricane season.

The global stock of ILS increased to $US25 billion ($35.8 billion) during the quarter.

Since 2010 Bermuda-based special purpose insurers have issued 108 ILS.

Bermuda is also host to foreign ILS listings, which augment the depth of the secondary market.

There are 74 ILS deals (92 tranches) listed on the Bermuda Stock Exchange (BSX), with an aggregate nominal value of about $US16.3 billion ($23.3 billion), of which 2% is issued by non-Bermuda entities. Ten new ILS deals were listed on the BSX during the quarter, and four matured.