Market updates and sector developments

Obra Capital has acquired the assets of asset management and investment research firm KDP and its affiliated companies. The transaction supports Obra’s expansion of its existing liquid markets capabilities in structured credit into the fundamental credit space. By combining KDP’s established research with Obra’s diversified asset management capabilities, the firm expects to augment its product suite to include the issuance of CLOs - where it is already an active investor – as well as more liquid commingled fund vehicles.

In other news…

Innovative corporate cat bond closed
Swiss Re Capital Markets has structured and placed US$250m of ILS issued with respect to certain real estate funds managed or controlled by affiliates of Blackstone. Dubbed Wrigley Re Series 2023-1, the transaction is Blackstone's first indemnity catastrophe bond and covers named storms and earthquakes in the US and Canada.

The deal is not only the first corporate cat bond covering named storms on an indemnity basis, but it also the first corporate cat bond covering multiple countries. It comprises two classes of principal at-risk variable rate notes: US$100m class A notes that provide protection on an indemnity per occurrence basis for named storms in the US and Canada and an indemnity annual aggregate basis for earthquakes in the US, excluding California, and Canada; and US$150m class B notes providing protection on an indemnity annual aggregate basis for earthquakes in California.

Both classes of notes have a three-year risk period starting on 28 July 2023 and introduce an innovative risk-based premium adjustment mechanism to adjust for changes in risk in the covered real estate portfolio.