Continuing Goodwin’s legacy of devising unprecedented legal solutions and structures at the intersection of capital and innovation, the Debt Finance team advised ILS Capital Management on the first-ever securitization of trapped capital, investor funds that are temporarily held by counterparties and thus unavailable for reinvestment until insurance claims are settled. The Bermuda-based investment firm specializing in insurance and reinsurance investments utilized the innovative structure in the completion of its $57 million offering of 5.50% asset-backed notes, a securitization of the residual value of trust accounts supporting reinsurance contracts. The transaction paves the way for similar reinsurance securitizations benefitting investors, with the potential to unlock a substantial portion of the industry's $15 billion in trapped capital.
ILS Capital Management is an employee-owned, SEC-registered investment advisor with $320 million in assets under advisement, 13 employees, and four offices worldwide. ILS Capital aims to generate returns by investing in insurance and reinsurance contracts across geographic regions and lines of business including property, marine, energy, crop, aviation, aerospace, and weather.
Tom Libassi, Co-Founder and Managing Partner of ILS Capital, said, “We are pleased to have worked with Goodwin on this landmark securitization, a solution to the industry-wide problem of trapped capital and a milestone in asset-backed securities. The Debt Finance team’s expertise and track record, along with our firms’ shared focus on developing innovative capital solutions, made it an ideal legal advisor for this transaction.”
The Goodwin team was led by Anna Dodson, Laura Hodges Taylor, John Ilardo, and Reid Bagwell, and included Ettore Santucci, Eryn Mathews, Brynn Peltz, Bill Stern, Greg Fox, Barry Bazian, Bill Weiss, Alex Apostolopoulos, and Jim Mattus.
For additional details, please read the press release.