Swiss Re successfully places first ever bond linked to Central American earthquakes

22 January 2008, New York

Swiss Re has successfully structured and placed USD 85 million of securities covering windstorm events in the United States as well as earthquakes in California and Central America.

The bond is the first ever linked to Central American earthquakes. The initial offering of notes by GlobeCat Ltd. closed on 21 December 2007. The risk modelling company EQECat was used as the calculation agent as well as for the initial risk analysis.

As part of an ongoing program, Swiss Re's Capital Markets structured and placed the securitisation and acted as the sole book runner for the initial USD 85 million offering.

The first two tranches of the issuance cover losses due to catastrophic hurricanes and earthquakes in the United States. The third tranche covers the non-peak perils of Guatemala and EL Salvador earthquakes. The trigger is the first of its kind in that the index is based on the population exposed to certain levels of ground-shaking intensity as measured by the Modified Mercalli Intensity scale.

The goal of the GlobeCat Ltd securitisation is to create a platform and a model by which charitable foundations, governmental relief organizations and corporations can leverage donations or governmental/international funding to the benefit of developing nations affected by natural disasters. Such a program will help these organizations in becoming more pro-active in planning and anticipating relief needs in areas of the world affected by severe catastrophes. In case of a triggering event, the funds will be quickly available for relief efforts rather than being raised after the event.

The GlobeCat Securitization has shown that this concept is viable and that donation to coverage leverage can be as high as 45 times. (USD 1 million of donations can be used for USD 45 million in relief) Other triggers are being developed for a wide variety of disasters.

Details of the notes placed in the initial offering are:


Size in million


Expected Maturity



USD 25


30 Dec. 2008

3 month Libor + 210 b.p.


USD 40


02 Jan. 2013

3 month Libor + 925 b.p.


USD 20


02 Jan. 2013

3 month Libor + 600 b.p.

Legal Disclaimer

This is not an offer to sell or the solicitation of an offer to buy any securities. The securities sold by GlobeCat Ltd. have not been registered under the US Securities Act of 1933, the Investment Company Act of 1940 or any state or foreign securities laws and, accordingly, may be offered, sold or resold only in transactions exempt from registration to qualified buyers that are residents of, purchasing in, and holding the securities in permitted US jurisdictions or permitted non-US jurisdictions.

Notes to editors

Swiss Re

Swiss Re is the world's leading and most 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.

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