GC Securities, a provider of investment banking services to the (re)insurance industry and affiliate of Guy Carpenter & Company, announced the placement of USD100 million Principal At-Risk Variable Rate Notes (”Notes”) through catastrophe bond program Queen Street II Capital Limited.
The Notes will provide three-year per occurrence protection to Munich Re against hurricanes in the United States and windstorms in Europe, utilizing a PCS state-weighted index trigger structure for U.S. hurricanes and a PERILS country-weighted index trigger structure for European windstorms.
In addition, a dedicated U.S. Treasury bill fund was created by MEAG, Munich Re’s asset management company, for the sole purpose of investing the proceeds from the Queen Street II Capital Limited offering in certain U.S. Treasury obligations.
GC Securities acted as a joint bookrunner and co-lead manager on the issuance. Munich Re is the Risk Transfer Counterparty for the issuance. AIR Worldwide Corporation is the modeling firm for the transaction.
Cory Anger, Global Head of ILS Structuring, GC Securities, stated, “This transaction provides the market with an innovative, high quality, transparent risk transfer and collateral solution. The use of PERILS in insurance-linked securities transactions is growing, as investors and sponsors alike appreciate triggers based on the unbiased, post-event loss reports provided by entities like PERILS and PCS (for certain US perils). The use of a dedicated U.S. Treasury bill fund is also appealing, as it was designed with respect to this specific cat bond structure.”
Chi Hum, Global Head of ILS Distribution, GC Securities, added, “GC Securities is proud to have been involved in the distribution effort of Munich Re’s latest catastrophe bond placement, Queen Street II Capital Limited. This transaction further demonstrates GC Securities’ ability to secure the most effective and efficient capacity on behalf of our clients. The success of Queen Street II Capital Limited provides further evidence of the increasing importance and utility of the catastrophe bond market as a meaningful component of an effective enterprise risk management strategy.
We also are pleased with the strong show of market support for this placement. Demand for cat bonds is becoming increasingly global, with 17 investors from North America, Bermuda, Europe and Asia Pacific regions participating in this issuance.”
* Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.