Swiss Re Capital Markets structures and places USD 100 million catastrophe bond for United Property & Casualty Insurance Company
07 July 2016, Zurich
Swiss Re Capital Markets has successfully structured and placed the issuance of USD 100 million of insurance-linked securities by Laetere Re Ltd. on behalf of United Property & Casualty Insurance Company, Family Security Insurance Company, Inc. and Interboro Insurance Company (together, "UPC"). The transaction is UPC's debut catastrophe bond and covers named storms and earthquakes affecting certain coastal states of the U.S.
Swiss Re Capital Markets underwrote the transaction via three classes of principal at-risk variable rate notes issued by Laetere Re Ltd. Laetere Re Ltd. is a Bermuda exempted company registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.
Each of the USD 30 million Class A notes, the USD 40 million Class B notes and the USD 30 million Class C notes has a one-year risk period starting June 1, 2016 and was structured as a discount note. The respective reinsurance agreements provide UPC with cascading per occurrence indemnity protection against named storms and earthquakes affecting certain states of the U.S.
Jean-Louis Monnier, Co-Head of ILS at Swiss Re Capital Markets, comments: "We are pleased to provide support to UPC on its debut catastrophe bond issuance. Laetere Re Ltd. is notable for its efficient structure – the first catastrophe bond sold at a discount pursuant to Rule 144A since 2009 – and the incorporation of a cascading per occurrence indemnity trigger. We hope that this transaction is the first of many catastrophe bonds for UPC as it seeks to build a long-term relationship with ILS investors and expand its reinsurance panel via this diversifying source of capital."
Swiss Re Capital Markets acted as the sole structuring agent and sole bookrunner.
The Laetere Re Ltd. notes were sold pursuant to Rule 144A of the U.S. Securities Act of 1933, as amended (the "Securities Act") and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject, to the registration requirements of the Securities Act and applicable state securities laws.
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The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk-taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of around 70 offices globally and is rated "AA-" by Standard & Poor's, "Aa3" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed in accordance with the International Reporting Standard on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.
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