King & Wood Mallesons (KWM) advised Taiping Reinsurance Company Limited (Taiping Re) as the sponsor on the issuance of a catastrophe bond (Cat Bond) in Hong Kong. The Cat Bond (issued on a private placement basis in accordance with Section 4(a)(2) of the U.S. Securities Act 1933) raised US$35 million and was issued by Silk Road Re Limited (Silk Road Re), a Hong Kong-incorporated special purpose insurer (SPI) authorised by the Insurance Authority (IA) to issue insurance-linked securities (ILS). As part of the transaction, Silk Road Re has entered into a retrocession arrangement with Taiping Re, providing Taiping Re with multi-year risk protection against earthquake risk in Mainland China and named windstorm risk in the United States.
As the only Hong Kong legal advisor to assist authorised SPIs to issue ILS since the launch of the Hong Kong ILS regime, the KWM team has been at the forefront of legal expertise in the Hong Kong ILS market. For more details about the SPI approval requirements, the Hong Kong ILS market outlook, the previous catastrophe bonds issuance in Hong Kong as advised by the KWM team, please refer to the articles "Rise of the Hong Kong ILS market – Insurance Authority publishes Guidelines on Application to carry on Special Purpose Business", “Hong Kong as an Emerging Hub for ‘Cat Bonds’: Insurance-linked Securities Outlook”, “KWM advises on China Reinsurance’s launch of the first in market special purpose insurer in Hong Kong” and “KWM advises on the first 144A Catastrophe Bond Offering in Hong Kong”. These successful launches of catastrophe bonds mark the increasing appetite for insurance-linked securities in the Hong Kong market.
KWM acted for the sponsor in respect of Hong Kong law, together with Cadwalader, Wickersham & Taft LLP as offshore deal counsel. The KWM team was led by partners Cindy Shek and Richard Mazzochi.
Any reference to "Hong Kong" or "Hong Kong SAR" shall be construed as a reference to "Hong Kong Special Administrative Region of the People's Republic of China".
