CATASTROPHE BOND INVESTMENT VENTURE MAKES INITIAL INVESTMENT.EDISON, N.J.--(BUSINESS WIRE)--June 12, 1997--PXRE Corporation (NYSE NYSE See: New York Stock Exchange : PXT PXT Pocket Excel Template ) today announced that its recently formed joint venture, Cat Bond Investors, has completed its first investment in catastrophe bonds catastrophe bond A debt security with a payoff tied to the relative severity of a natural disaster such as a hurricane or earthquake. Bondholders are paid with insurance premiums but may have to accept reduced principal repayment in the event the specified . This first investment is in hurricane bonds issued by Residential Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Limited, a special purpose reinsurance company for ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. insurer USAA USAA United Services Automobile Association USAA Urban Superintendents Association of America USAA United States Achievement Academy USAA United States Arbitration Act of 1925 USAA United States Axemen's Association USAA United States Air-Table-Hockey Association . Cat Bond Investors was organized by PXRE and Phoenix Home Life Mutual Insurance Company with initial committed capital of $20 million. It specializes in investing in catastrophe bonds with returns that are determined by insured losses from catastrophic events. Because the return on the venture's investments is influenced by catastrophic losses incurred by the bond issuers, PXRE provides an underwriting review of each potential investment. Commenting on the announcement, Steven I. Goldstein, Vice President of Underwriting and Trading for PXRE, said, "We believe that with our specialized expertise in property reinsurance, we are uniquely positioned to assess the risk/reward relationship inherent in catastrophe bonds. The bonds distribute the underlying catastrophe risk in much the same way that reinsurance does. Our objective in selecting investments for the venture is to assume risk only when we are adequately compensated for that risk. We believe our first investment is very attractive in that regard." Goldstein noted that Cat Bond Investors currently is examining other investment opportunities. Phoenix is an insurance and investment management company with corporate offices in Hartford, Conn. With approximately $40 billion in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , it is the nation's ninth largest mutual life insurer and one of its largest money managers. PXRE provides reinsurance products and services to a domestic and international marketplace, with principal emphasis on commercial and personal property risks. To request other printed investor material from PXRE, or additional copies of this news release, please call (732) 906-6785, send e-mail to Investor_Relations@PXRE.com, or visit PXRE's web site at www.pxre.com . CONTACT: PXRE Corporation, Edison Sanford M. Kimmel, 732/906-8100 |
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