May 18th, 2011

GC Securities* Completes Catastrophe Bond Johnston Re 2011-1 Class A and Class B Notes for State of North Carolina’s Windpool

Posted at 10:02 AM ET

GC Securities announced the placement of the Series 2011-1 Class A and B Notes, with notional principal at $201,835,000, through an existing catastrophe bond shelf program, Johnston Re Ltd., to benefit the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association (collectively, the NC JUA/IUA). This is the third consecutive year that the NC JUA/IUA has utilized the cat bond market to manage its hurricane risk.

The new bonds will sit alongside the dropdown layer from Johnston Re’s Series 2010 Class A Notes and alongside the static layer of Johnston Re’s Series 2010 Class B Notes, providing the NC JUA/IUA with a combined $506,835,000 in catastrophe bond protection.

GC Securities served as sole bookrunner and co-lead manager.

RISK PROFILE

Series 2011-1 Notes

Size

S&P Rating

Expected Maturity

Coupon

Class A Notes

$70,000,000

BB- sf

May 8, 2014

TMM + 7.60%

Class B Notes

$131,835,000

BB- sf

May 8, 2014

TMM + 6.90%

 

Steve Carroll, Chairman of the NC JUA/IUA and Member Company Board Representative, Executive Vice President and General Manager of NC Farm Bureau Mutual Insurance Co., Inc., stated, “The consistency and competitiveness of capital markets capacity that the NC JUA/IUA has been able to access for the third year in a row demonstrates one aspect of the flexibility and strength of the NC JUA/IUA’s hurricane loss financing program. Maintaining strong claims-paying ability for our policyholders in the event of a major hurricane while also lessening the post-event financial impact to member insurers and statewide policyholders is an important attribute of the NC JUA/IUA’s hurricane loss financing program.”

Cory Anger, Global Head of ILS Structuring, GC Securities, added, “Structuring this transaction as a takedown from the existing Johnston Re shelf saved our client time and money, while providing them with the protection they seek. We are pleased how this new issuance builds upon the success of the Johnston Re Series 2010-1 Notes and re-utilizes the Johnston Re program, which was structured to work alongside the landmark 2009 cat bond program, Parkton Re.”

Chi Hum, Global Head of ILS Distribution, GC Securities, commented, “This issuance is an important extension of our client’s capability to finance hurricane loss. It is also a continued endorsement of cat bonds as a key component in catastrophe risk management by both issuers and investors.”

* 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. Cory Anger and Chi Hum are registered representatives of MMC Securities Corp.

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