Swiss Re enters into USD 1.5 billion long term Letter of Credit facility, supporting its leading life reinsurance business

22 December 2008, Zurich

Swiss Re announced today that it has entered into a USD 1.5 billion long term Letter of Credit (LoC) facility with JP Morgan.

As a result of the unprecedented turmoil in the capital markets, significant opportunities are emerging for well-capitalised insurance and reinsurance companies. Swiss Re is in a strong position to respond to increasing demands from our clients for reinsurance solutions, both in Property and Casualty, and Life and Health.

Through the long term letter of credit facility with JP Morgan, Swiss Re demonstrates its access to long term financing at competitive rates. Maturing in 2028, the LoC facility has a life of 20 years, with a pricing reset feature after the first 10 years. This facility replaces and expands the existing arrangements Swiss Re currently has in place in order to meet US regulatory requirements for its life business.

Jacques Aigrain, Swiss Re’s Chief Executive Officer, said: “Notwithstanding the difficult capital market environment, we have concluded an attractive, long term arrangement with JP Morgan which will further enhance our position to be able to benefit from opportunities that arise from the current market environment. Clients turn to us as they look for a very strong counterparty in terms of superior capital and liquidity – and we are responding accordingly.”

Notes to editors

Swiss Reinsurance Company Ltd

Swiss Re is a leading and highly diversified global reinsurer. The company operates through offices in more than 25 countries. Founded in Zurich, Switzerland, in 1863, Swiss Re offers financial services products that enable risk-taking essential to enterprise and progress. The company’s traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated “AA-“ by Standard & Poor’s, “Aa2” by Moody’s and “A+” by A.M. Best.

Cautionary note on forward-looking statements

Certain statements and illustrations contained herein are forward-looking. These statements and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-looking statements typically are identified by words or phrases such as “anticipate”, “assume”, “believe”, “continue”, “estimate”, “expect”, “foresee”, “intend”, “may increase” and “may fluctuate” and similar expressions or by future or conditional verbs such as “will”, “should”, “would” and “could”. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results, performance, achievements or prospects to be materially different from any future results, performance, achievements or prospects expressed or implied by such statements. Such factors include, among others:

  • changes in global economic conditions and the risk of a global economic downturn;
  • direct and indirect impact of continuing deterioration in the credit markets, and further adverse rating actions by credit rating agencies in respect of structured credit products or other credit-related exposures and of monoline insurance companies;
  • the occurrence of other unanticipated market developments or trends;
  • the ability to maintain sufficient liquidity and access to capital markets;
  • the cyclicality of the reinsurance industry;
  • uncertainties in estimating reserves;
  • the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, currency values and other market indices;
  • changes in Swiss Re’s investment results;
  • uncertainties in valuing credit default swaps and other credit-related instruments;
  • possible inability to realise amount on sales of securities in the Group’s investment
    portfolio equivalent to their mark-to-market values recorded for accounting purposes;
  • the possibility that Swiss Re’s hedging arrangements may not be effective;
  • the frequency, severity and development of insured claim events;
  • acts of terrorism and acts of war;
  • mortality and morbidity experience;
  • policy renewal and lapse rates;
  • changes in rating agency policies or practices;
  • the lowering or loss of one of the financial strength or other ratings of one or more companies in the Group;
  • political risks in the countries in which Swiss Re operates or in which it insures risks;
  • extraordinary events affecting Swiss Re’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
  • risks associated with implementing Swiss Re’s business strategies;
  • the impact of current, pending and future legislation, regulation and regulatory and legal actions;
  • the impact of significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions, including, in the case of acquisitions, issues arising in connection with integrating acquired operations;
  • changing levels of competition; and
  • operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks.

These factors are not exhaustive. Swiss Re operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.