Fitch Rates NeHi, Inc. Catastrophe-Linked Notes.Business Editors NEW YORK--(BUSINESS WIRE)--July 14, 2000 Fitch assigns a `BB' rating to the $41,500,000 of floating rate notes issued by NeHi, Inc. The notes represent a capital market 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. arrangement entered into by Vesta Fire Insurance Corporation (Vesta). The rating addresses the timely payment of interest and the ultimate payment of principal by the final maturity date. Aon Capital Markets structured and underwrote the notes. Applied Insurance Research (AIR) provided the catastrophic models and the risk analysis to support the transaction. The rating reflects Fitch's catastrophic risk based bond rating methodology which incorporates the following elements: (1) a review of AIR's methodology and models for analyzing the catastrophic events - which are hurricanes occurring in the Northeast US and hurricanes and tropical storms occurring in Hawaii; (2) the loss distributions resulting from the AIR models; and (3) the legal and structural soundness of the securities. NeHi, Inc. is a special purpose Delaware corporation A Delaware corporation is a corporation chartered in the U.S. state of Delaware. Delaware is well known as a corporate haven, and thus, over 50% of US publicly-traded corporations and 58% of the Fortune 500 companies are incorporated in the state. whose business consists primarily of the issuance of the notes and the entrance into certain arrangements with NeHi Re, LP (NeHi Re), an Illinois limited partnership authorized as a special purpose limited syndicate under the regulations of INEX INEX Integrated Numerical Experiment INEX Internet Neutral Exchange . NeHi Re, in turn, has entered into a retrocessional agreement with Vesta Capital Insurance Syndicate, Inc. (Vesta Capital), an Illinois corporation authorized as a syndicate under INEX and wholly owned by Vesta. The retrocessional agreement provides that NeHi Re will indemnify To compensate for loss or damage; to provide security for financial reimbursement to an individual in case of a specified loss incurred by the person. Insurance companies indemnify their policyholders against damage caused by such things as fire, theft, and flooding, which Vesta Capital for losses arising from defined events Defined event The definition applicable to the trigger of a loss in an insurance policy, particularly political risk insurance. occurring during the term of the notes. Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide. |
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