Global law firm Clifford Chance has advised Aon Securities as the initial purchaser of US$150 million catastrophe bonds (cat bonds) issued by Nakama Re Pte Ltd, providing Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, US$150 million of earthquake coverage. The notes will provide Zenkyoren with Japanese earthquake reinsurance over a 5-year period.

The cat bond market has been a pivotal mechanism for the insurance sector since the late 1990s, offering a financial safeguard against the significant payouts following natural disasters. Nakama Re Pte Ltd’s issuance builds on a record setting Q1 during which over US$4.2billion of new risk capital came to market .

The transaction was jointly led by partners Will Winterton in London, Lena Ng in Singapore, and Gareth Old in New York.

The deal team also comprised lawyers from across the firm’s Global Financial Markets practice, spanning the New York, London, and Tokyo offices. The team included Lead Senior Associate Brij Patel in London, Counsel Chihiro Ashizawa in Tokyo, Associate Tiffany Kong in New York, Senior Associate Allison Tan in Singapore, Associate Nao Kondo in Tokyo, and Trainees Serena Polycarpou and Adelina Maghet, both based in London.

Lena commented, “Zenkyoren’s decision to return to Singapore for its 2024 catastrophe bond issuance through its special purpose reinsurance vehicle is a strong affirmation of Singapore’s growing stature as a leading hub for Insurance-Linked Securities (ILS) in Asia. This move not only highlights the sophisticated infrastructure and conducive regulatory environment that Singapore offers but also underscores the confidence that global entities like Zenkyoren place in the region’s capacity to support complex financial instruments.”

Will added, “We are proud to have advised Aon Securities on this significant catastrophe bond issuance. This transaction demonstrates the continued interest in the ILS market, and we are pleased to have provided our legal expertise to its success.”