Oxbridge Re Ltd., the Cayman Islands-based risk-focused Gulf Coast reinsurance company, successfully raised $2.4 million through the sale of digital or token reinsurance securities named DeltaCat Re, which will be used to support secured reinsurance contracts written through its sidecar structure, Oxbridge Re NS.
We first reported in early February on plans by Oxbridge Re to use its registered subsidiary SurancePlus Inc. to issue tokenized reinsurance securities that are issued using the Avalanche blockchain.
The securities represent fractional interests in reinsurance contracts underwritten by its reinsurance sidecar, Oxfbridge Re NS, with investors expected to benefit from a return through the execution of the underlying reinsurance contracts which will sit in the sidecar. because.
The offer was opened at the end of March, with Oxbridge Re also revealing at the time that the tokenized reinsurance securities should be tradable via a secondary market.
SurancePlus has now closed the offering, with a $2.4 million private equity raise through the sale of 244,776 of its token reinsurance security, DeltaCat Re.
The share capital will now be used by Oxbridge Re’s sidecar reinsurance subsidiary, Oxbridge Re NS, for contracts written for the 2023-2024 treaty year.
Oxbridge Re Chairman and CEO Jay Madhu said, “SurancePlus has pioneered Oxbridge Re’s existing special purpose vehicle for raising reinsurance capital, Oxbridge Re NS Limited, by applying digital innovations and knowledge of the Web3 space and democratizing access to reinsurance as an alternative investment. .
“In doing so, we believe we are the first publicly traded company to have successfully raised capital for catastrophe reinsurance risks through the sale of tokenized reinsurance securities.”
DeltaCat Re tokens were sold to accredited investors in the United States under Rule 506(c) of Regulation D and to non-US investors under Regulation S of the US Securities Act 1933, as amended.
The tokenized securities were issued in a series named Cat Re, with DeltaCat Re the first offering of this, and Oxbridge Re hopes to have additional tokens offered in the coming years.
Oxbridge Re has previously said it sees a significant opportunity for investors to access reinsurance-linked returns through its digital securities, with 42% returns possible in the first year, which is likely under conditions. without loss.
The idea is to provide capital through a differentiated source, while tokenized preferred shares should facilitate liquidity for investors.
Although this is a relatively small capital raise, in reinsurance sidecar terms, for Oxbridge Re, it will in fact be the largest for its Oxbridge Re NS vehicle, the previous largest having been of $2 million in 2018.
Oxbridge Re then launched a second, smaller reinsurance sidecar deal in June 2019, when it sponsored a $600,000 Oxbridge Re NS issue.
Then, in 2020, Oxbridge Re renewed its fully guaranteed reinsurance sidecar vehicle Oxbridge Re NS Ltd. for a reduced amount of only $216,000.
So this new method of raising capital for the sidecar vehicle has proven to be the most successful to date and it will be interesting to see how much future offerings from SurancePlus can grow.
View details of many sidecar reinsurance transactions in our directory.