Swiss Re Capital Markets structures and places USD 125 million catastrophe bond for FMTAC, a subsidiary of the MTA
02 June 2017, New York
Swiss Re Capital Markets has successfully structured and placed the issuance of USD 125 million of insurance-linked securities by MetroCat Re on behalf of the First Mutual Transportation Assurance Company ("FMTAC"), a New York State licensed and domiciled captive insurance company and subsidiary of the Metropolitan Transportation Authority ("MTA"). The transaction is MTA's second catastrophe bond and covers storm surge resulting from named storms and earthquakes in the New York City metropolitan area.
Swiss Re Capital Markets underwrote the transaction via one class of principal at-risk variable rate notes issued by MetroCat Re Ltd., a Bermuda exempted company licensed and registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.
The USD 125 million 2017-1 notes have an approximately three-year risk period starting May 23, 2017 and provide protection against storm surge caused by named storms and earthquakes, each on a parametric basis with a binary payout.
Judy Klugman, Co-Head of ILS at Swiss Re Capital Markets, comments: "Swiss Re is pleased to provide support to FMTAC on its second catastrophe bond issuance. The transaction was well received by investors, which was reflected in the final pricing terms. The protection provided to FMTAC is a complement to the coverage they get from the traditional reinsurance market and the parametric trigger provides a transparent means to determine a relatively rapid payout following an event."
Swiss Re Capital Markets acted as the sole structuring agent and lead bookrunner.
The MetroCat Re Ltd. 2017-1 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 80 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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