Swiss Re Obtains USD 255 Million of Catastrophe Protection From Innovative Securitisation Structure.Business Editors Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. has received USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 255 million of four-year protection against a series of natural catastrophe risks. As part of the transaction, Swiss Re signed a financial contract with PIONEER 2002 Ltd. ("PIONEER"), a special purpose Cayman Islands Cayman Islands (kā`mən), British dependency (2005 est. pop. 44,300), 100 sq mi (259 sq km), comprising three islands in the West Indies. exempted company and the issuer of the USD 255 million of securities. Subsequently, Swiss Re Capital Markets Corporation, acting as sole bookrunner, privately placed the securities with institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . The proceeds from the offering fully collateralise PIONEER's financial contract with Swiss Re and will serve to replenish Swiss Re's capital should any of the specified natural catastrophes occur. The financial contract provides Swiss Re with protection based on parametric indices tied to natural perils. Under these indices, Swiss Re's recovery after an event is tied to physical parameters such as earthquake strength or wind speed. Five of the indices address individual risks, North Atlantic hurricanes, European windstorms, California earthquakes, Central U.S. earthquakes and Japanese earthquakes, while the sixth is a combination of the other indices. Details on the specific PIONEER tranches are as follows:
Tranche A
Peril: North Atlantic Hurricane
USD 85 million
BB+/Ba3*
600 bps**
Tranche B
Peril: European Windstorm
USD 50 million
BB+/Ba3*
500 bps**
Tranche C
Peril: California Earthquake
USD 30 million
BB+/Ba3*
600 bps**
Tranche D
Peril: Central US Earthquake
USD 40 million
BBB-/Baa3*
175 bps**
Tranche E
Peril: Japanese Earthquake
USD 25 million
BB+/Ba3*
425 bps**
Tranche F
Multi-Peril(Includes all perils in the A through E tranches.)
USD 25 million
BB+/Ba3*
750 bps**
Notes:
* Ratings by Standard & Poor's Rating Service and Moody's
Investors Service, Inc., respectively.
** Spread (in basis points) to three month LIBOR.
"Swiss Re recognises the benefits of the capital markets for the retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. of insurance risks. It is our belief that the creation of standardised parametric indices will encourage broader market acceptance and allow for future issuance using these indices," said John Fitzpatrick There have been a number of people named John Fitzpatrick:
Notes to Editors Swiss Re is one of the world's leading reinsurers with over 70 offices in more than 30 countries. Gross premiums in 2001 amounted to CHF CHF In currencies, this is the abbreviation for the Swiss Franc. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 28.5 billion. Swiss Re has a strong track record of earnings growth only interrupted in 2001 with a net loss of CHF 165 million, largely due to the 11 September 2001 event. At the end of 2001, Swiss Re's shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. amounted to CHF 22.6 billion and the total balance sheet stood at CHF 170 billion. Swiss Re is rated "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " by Standard & Poor's, "Aaa" by Moody's and "A++" by A.M. Best. Swiss Re has been a leader in the insurance-linked securities market, creating Swiss Re Capital Markets Corporation in 1995 to develop the market and sponsoring one of the first such transactions, SR Earthquake Ltd. in 1997. |
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