FM Global Utilizes a US$300 Million Catastrophe Bond.JOHNSTON, R.I. -- Commercial and industrial property insurer FM Global has announced the private placement of a US$300 million catastrophe bond 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 to protect against the consequences of unusual earthquake activity in the Pacific Northwest region
The Northwest Region of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada. The transaction is the first of its kind for FM Global. "This catastrophe bond is a cost-effective, conservative and highly secure transaction that protects FM Global's balance sheet and provides our policyholders with added financial protection," said Jeff Burchill, chief financial officer, FM Global. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Burchill, FM Global's scientists have validated recent consensus from the scientific community that, approximately once every 500 years, an earthquake along the Cascadia Subduction Zone The Cascadia subduction zone is a very long sloping fault that stretches from northern Vancouver Island to northern California. Geography The zone separates the Juan de Fuca, Explorer, Gorda and the North American Plate. could release significantly more energy than previously understood. The fault extends from southern British Columbia in Canada to northern California. Goldman Sachs, a leading investment banking, securities and investment management firm, served as lead manager to place the catastrophe bond. FM Global is a mutual commercial and industrial property insurance organization with a unique risk management focus. For 170 years, leading corporations around the world have benefited from FM Global's superior insurance capacity, risk assessment services and proven property loss prevention engineering expertise and research. FM Global helps its clients better understand the nature of their risks and develop sound property loss prevention solutions that can effectively improve their risk profile. Headquartered in Johnston, Rhode Island Johnston is a town in Providence County, Rhode Island, United States. The population was 28,195 at the 2000 census. One of Rhode Island's earliest houses, a stone-ender called the Clemence Irons House (1691) is open as a museum in Johnston. , USA, with offices worldwide, FM Global is rated A+ (Superior) by A.M. Best and AA- (Very Strong) by Fitch. |
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