Oxbridge Re launches tokenized RWAs for participation shares

Participation shares start at $10

Oxbridge Re launches tokenized RWAs for participation shares


By Kenneth Araullo

Oxbridge Re has announced the initiation of this year’s offering of participation shares – real-world assets (RWAs) – which will be represented by digital tokens under a three-year participation share investment contract (PSIC).

The offering marks the second iteration of the Cat Re series and will be executed by SurancePlus Inc, an entity entirely owned by Oxbridge Re, planning to issue between 500,000 to 1,000,000 Participation Shares under the label “EpsilonCat Re.”

Oxbridge Re explained that the shares are priced initially at $10 each, and that they are distinct from shares in SurancePlus and offer no preemptive or conversion rights, instead providing contractual rights as outlined in the PSIC.

Proceeds from the sale of these shares are earmarked for investment in one or more participating notes issued by Oxbridge Re NS, a reinsurance company based in the Cayman Islands and affiliated with Oxbridge Re. The funds raised from these notes will then be allocated towards collateralized reinsurance contracts underwritten by Oxbridge Re NS.

Gains of more than 40%

In scenarios devoid of losses, investors holding the participation shares can expect a return equivalent to the original share price plus a 20% preferred return, followed by an 80% share of any additional proceeds.

Oxbridge Re touts that investors stand to gain a projected annualized return of 42%, assuming there are no casualty losses related to properties reinsured by Oxbridge Re’s subsidiaries. This projection follows the success of last year’s DeltaCat Re token offering, which is on track to yield returns over 45%, exceeding the anticipated 42% return rate, despite the impact of Hurricane Idalia hitting Florida as a Category 3 storm in 2023.

Jay Madhu, president and CEO of Oxbridge Re Holdings, expressed optimism about the company’s venture into RWA tokenization and its potential for growth, especially within the SurancePlus subsidiary.

“Further reinforcing our strategic vision, Blackrock has announced its intention to tokenize $10 trillion of its assets,” Madhu said. “Concurrently, we witness the steady adoption of blockchain technology across traditional financial institutions and asset classes, including fiat currencies, equities, government bonds, and real estate. As pioneers in the RWA market, we are energized by the transformative potential of our repositioning and the expansion into new business lines, which we believe will create significant value for our shareholders.”

Elsewhere, the reinsurer recently posted higher net losses in its 2023 results, although it did see net premiums rise.

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