Oxbridge Re Announces Launch of Tokenized Real-World Asset Offering EpilsonCat Re
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Insights
The launch of Oxbridge Re Holdings Limited's offering of Participation Shares in the form of digital tokens, named 'EpsilonCat Re', represents a significant event in the alternative investment and reinsurance industry. By tokenizing Reinsurance Securities, the company is tapping into the growing interest in blockchain-based financial instruments. The targeted annualized return of 42% is notably high and it is essential to consider the associated risks, especially given the volatile nature of tokenized assets and the reinsurance market's susceptibility to catastrophic events.
Investors should be aware that reinsurance contracts are inherently risky, as they depend on the frequency and severity of insured events. While the previous year's DeltaCat Re token investors are expecting returns exceeding 45%, it is important to remember that past performance is not indicative of future results. The resilience shown in the face of Hurricane Idalia suggests a robust risk management strategy, but investors must remain cautious of potential future natural disasters that could impact returns.
Furthermore, the structure of the Participation Shares, which are not shares in SurancePlus and carry no preemptive or conversion rights, may limit investors' influence over the company's operations. The contractual rights against SurancePlus as contained in the PSIC are a key factor to consider, as they define the terms of the investment and the conditions under which returns will be paid out.
The offering of EpsilonCat Re tokens under the SEC Regulation D Rule 506(c) and Regulation S for non-US investors highlights the legal complexities associated with securities offerings in the digital asset space. Accredited investors are subject to specific regulations that aim to protect them due to the higher risks involved with such investments. The legal framework governing these tokens is crucial, as it ensures that the company complies with securities laws and mitigates the risk of regulatory penalties that could affect investor confidence and the company's financial stability.
It's important to note that the Participation Shares do not grant equity in SurancePlus, which suggests that the legal standing of investors is different from that of traditional shareholders. The PSIC is a critical document that investors should review thoroughly to understand their rights and the conditions under which returns are distributed. The absence of preemptive and conversion rights means that investors rely solely on the contractual promises made by SurancePlus, which could be a point of concern if the company's financial health were to deteriorate.
Offering tokenized reinsurance securities is a strategic move that aligns with the current trend of integrating blockchain technology into traditional financial services. The innovation in offering Participation Shares as digital tokens is likely to attract investors seeking exposure to new asset classes and could potentially open up new capital streams for Oxbridge Re Holdings Limited. However, the success of this offering will heavily depend on market sentiment towards tokenized assets and the broader adoption of blockchain in the reinsurance industry.
Investor appetite for such instruments is influenced by the overall performance of the cryptocurrency market, regulatory developments and the perceived stability of the reinsurance sector. The announcement of a high targeted return may draw attention, but it is also indicative of the level of risk associated with the investment. The market's response to this offering will provide valuable insights into the viability and demand for tokenized financial products in the reinsurance space.
GRAND CAYMAN, Cayman Islands, March 27, 2024 (GLOBE NEWSWIRE) -- Oxbridge Re Holdings Limited (Nasdaq: OXBR), (the “Company”), and its subsidiaries which are engaged in the business of tokenized Real-World Assets (“RWAs”), initially in the form of Tokenized Reinsurance Securities, and reinsurance business solutions to property and casualty insurers, announced the launch of its offering of this year’s Participation Shares represented by digital tokens to be issued under a 3-year Participation Share Investment Contract (the “PSIC”). The offering which is the second year of the Cat Re series, is being conducted by our indirectly wholly owned subsidiary SurancePlus Inc. (“SurancePlus”) will issue between 500,000 to 1,000,000 Participation Shares, represented by digital tokens labelled “EpsilonCat Re”. The Participation Shares will be offered at an initial price of
The net proceeds from the offer and sale of the Participation Shares will be used by SurancePlus to purchase one or more participating notes of Oxbridge Re NS, an affiliated Cayman Islands licensed reinsurance entity, and the proceeds from the sale of such participating notes will be invested in collateralized reinsurance contracts to be underwritten by Oxbridge Re NS. In a loss free year the holders of the Participation Shares will be entitled to proceeds from the payment of the participating notes in the amount of a preferred return equal to the initial Participation Share price, plus
The EpsilonCat Re tokens are being offered to accredited investors in the United States by SurancePlus under Rule 506(c) of SEC Regulation D and to non-US investors pursuant to Regulation S of the US Securities Act 1933, as amended. Assuming no casualty losses to properties reinsured by Oxbridge Re’s reinsurance subsidiaries, EpsilonCat Re token investors are expected to receive a targeted annualized return of
“We are particularly enthusiastic about the prospects of our venture into RWA tokenization and the direction it sets for our company. Through strategic initiatives undertaken this year, we are positioning ourselves for substantial growth within our SurancePlus subsidiary as a premier RWA Web3-focused entity,” commented Oxbridge Re Holdings President and Chief Executive Officer Jay Madhu. “Further reinforcing our strategic vision, Blackrock has announced its intention to tokenize
Disclaimer: This press release does not constitute an offer to sell nor a solicitation of an offer to buy the Participation Shares (the “Securities”) and the EpsilonCat Re tokens. The Securities are not required to be, and have not been, registered under the United States Securities Act of 1933, as amended, in reliance on the exemptions provided by Regulation S and Regulation D (SEC Rule 506(c)) thereunder. Offers and sales of the Securities are made only by, and pursuant to, the terms set forth in the Confidential Private Placement Memorandum relating to the Securities. The offering of the Securities is not being made to persons in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky, or other laws of such jurisdiction.
About Oxbridge Re Holdings Limited
Oxbridge Re Holdings Limited (www.OxbridgeRe.com) (NASDAQ: OXBR, OXBRW) (“Oxbridge Re”) is headquartered in the Cayman Islands. The company offers tokenized Real-World Assets (“RWAs”) as Tokenized Reinsurance Securities and reinsurance business solutions to property and casualty insurers, through its wholly owned subsidiaries Oxbridge Reinsurance Limited, Oxbridge Re NS, and SurancePlus Inc.
Insurance businesses in the Gulf Coast region of the United States purchase property and casualty reinsurance through our licensed reinsurers Oxbridge Reinsurance Limited and Oxbridge Re NS.
Our new Web3-focused subsidiary, SurancePlus Inc. has developed the first “on-chain” reinsurance RWA of its kind to be sponsored by a subsidiary of a publicly traded company. By digitizing interests in reinsurance contracts as on-chain RWAs, SurancePlus Inc. has democratized the availability of reinsurance as an alternative investment to both U.S. and non-U.S. investors.
About SurancePlus Inc.
SurancePlus Inc. (www.SurancePlus.com) is an indirect wholly owned subsidiary of Oxbridge Re Holdings Limited, incorporated in the British Virgin Islands. SurancePlus was organized to serve as a special-purpose vehicle to make tokenized side-car investments in reinsurance contracts entered into by Oxbridge Re’s licensed reinsurance subsidiaries.
Company Contact:
Oxbridge Re Holdings Limited
Jay Madhu, CEO
+1 345-749-7570
jmadhu@oxbridgere.com
Forward-Looking Statements
This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on 26th March 2024. The occurrence of any of these risks and uncertainties could have a material adverse effect on the Company’s business, financial condition and results of operations. Any forward-looking statements made in this press release speak only as of the date of this press release and, except as required by law, the Company undertakes no obligation to update any forward-looking statement contained in this press release, even if the Company’s expectations or any related events, conditions or circumstances change.
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