Avla Seguros announced on Tuesday that it, along with Galapagos Capital, Tivio Capital and fintech Marvin, completed a 126 million reais placement of an insurance-linked security that was distributed to the open market. The transaction raised approximately $25.07 million and marks what Avla describes as the first insurance-linked security in Brazil made available to a broader pool of investors.
The security is structured to be purchased by professional investors and provides coverage for credit insurance operations related to a major retail company. Avla noted that, while this is the fourth insurance-linked security issuance in Brazil, it is the first time such an instrument has been distributed beyond a narrow set of institutional participants to the open market.
Fintech Marvin played a dual role in the deal, acting as collateral agent and co-structurer. Bernardo Vale, Marvin's CEO, stated that the transaction is the first in a sequence of offerings the company intends to bring to market during the year.
Bradesco Group’s alternative asset manager Tivio Capital fulfilled the role of asset manager for the structure and also participated as the anchor investor for the placement. Avla Brasil led the overall process, coordinating the issuance and distribution to the targeted professional investor base.
The placement highlights coordination among an insurer, alternative asset manager, private capital provider and a fintech specialist to deliver an insurance-linked security intended to transfer certain insurance exposures to capital market investors. Details provided by the parties specify the instrument's link to credit insurance coverage for a large retailer but do not disclose the name of that retailer.
Market participants and observers will be watching subsequent transactions referenced by Marvin's CEO to see whether similar structures follow and whether this type of instrument gains traction with a wider set of investors in Brazil's capital markets.