Swiss Re Capital Markets structures and places USD 925 million catastrophe bond for the California Earthquake Authority
23 May 2017, New York
Swiss Re Capital Markets has successfully structured and placed the issuance of USD 925 million of insurance-linked securities by Ursa Re Ltd., to be used for the protection of the California Earthquake Authority ("CEA"). The transaction is one of the largest indemnity, annual aggregate catastrophe bonds and covers California earthquakes. With this deal the CEA is well prepared to handle the economic consequences of potential earthquakes.
Swiss Re Capital Markets underwrote the transaction through two classes of principal-at-risk variable rate notes issued by Ursa 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 CEA entered into two reinsurance agreements with Ursa Re Ltd. receiving protection on an indemnity, annual aggregate basis, against residential homes for earthquake damage in California. Ursa Re Ltd. collateralised its liabilities under the reinsurance agreements via the issuance of USD 425 million Class B Notes and USD 500 million Class E Notes to capital markets investors. Both Classes of Notes have a three-year risk period starting May 17, 2017.
"Swiss Re is pleased to provide continued support to the CEA on its largest catastrophe bond issuance to date. The transaction was well received by investors, as demonstrated by, among other factors, the final issuance size," said Judy Klugman, Co-Head of ILS at Swiss Re Capital Markets. "We were also glad to be able to support the CEA in its desire to make future issuances more efficient by introducing pre-modeled Program Notes. Such Program Notes are intended to allow the CEA to tap investor demand on a more timely and cost efficient basis."
Swiss Re Capital Markets acted as the sole structuring agent and joint bookrunner.
The Ursa 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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Swiss Re Capital Markets
In the U.S., securities products and services are offered through Swiss Re Capital Markets Corporation, a registered broker dealer and a member of FINRA and SIPC. In the European Economic Area, securities products and services are offered through Swiss Re Capital Markets Limited. Swiss Re Capital Markets Limited is authorized and regulated in the U.K. by the Financial Conduct Authority, and benefits from a passport into certain Member States of the European Economic Area. Swiss Re Capital Markets Corporation and Swiss Re Capital Markets Limited, together "Swiss Re Capital Markets", are wholly owned subsidiaries of Swiss Re Ltd.
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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