Secondary trading

US broker-dealer regulator the Financial Industry Regulatory Authority (Finra) is planning to disseminate pricing and volume information on catastrophe bond trades completed by its members from the end of June.

The flurry of primary cat bond issuance over the past month has sparked secondary trading interest around some of the new bonds, as some ILS traders questioned whether the market is reaching a floor.

An influx of new capital into the ILS market at the start of the year caused cat bond spreads to tighten and bond prices to climb yet higher on the secondary market, according to the Aon Benfield ILS trading team.

Swiss Re Capital Markets said that cat bond premiums are likely to remain in a "holding pattern" of tight spreads for the first quarter as investors contend with a high volume of maturing bonds and expectations that new issuance activity will be rather slow over the first two months of the year.

ILS traders have predicted that secondary trading volumes will reach $3bn-$3.5bn in 2013.

The secondary cat bond market has seen relatively active trading levels over the past month, with ILS investors looking to trade short-dated bonds that come off risk this month, Trading Risk understands.

Listed ILS fund DCG Iris reported an active month for cat bond trading in June as it moved out of several positions in order to lock in mark-to-market profits, according to its latest monthly report

The robust pipeline of new cat bonds issued in 2013 led to high levels of trading on the secondary market during July, with some light trading continuing in the typically quiet month of August, sources said

Berkshire Hathaway has returned to the life settlements market for the first time since 2006 as it completed the $60mn purchase of a portfolio with a face value of $300mn.

Outstanding cat bond volumes reached $17.1bn by the end of June 2013, just nudging out the previous record high of $17bn set in 2007, according to Swiss Re's latest update on the ILS market.

A group of ILS funds tracked by the Eurekahedge ILS Advisers Index posted an average return of 0.42 percent in May, with all the funds represented posting positive figures for the month

Most cat bonds with exposure to aggregate tornado risk showed positive pricing movement between the start of May and early June after a spate of severe US storm strikes last month, according to pricing data obtained by Trading Risk.