April 28th, 2014

GC Securities* Completes 144A Indemnity Triggered Europe Windstorm Catastrophe Bond for Assicurazioni Generali S.p.A.

Posted at 11:30 PM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of Principal At-Risk Variable Rate Notes, with notional principal at €190,000,000, through a newly formed special purpose reinsurance vehicle domiciled in Ireland, Lion I Re Limited, to benefit Assicurazioni Generali S.p.A., an Italian insurance company and the parent company of the Generali Group. This is the first time that Assicurazioni Generali S.p.A. has utilized the cat bond market and is the first ever 144A cat bond to provide indemnity protection against Europe windstorm risks. Additionally, it is the first Italian sponsored catastrophe bond

The bond provides three years of per occurrence indemnity protection for Europe windstorms affecting selected European countries. 

GC Securities served as lead structurer and joint bookrunner. 

PRINCIPAL AT-RISK VARIABLE RATE NOTES - PROFILE  

Size

Fitch Rating

Expected Maturity

Coupon

€190,000,000

B+ sf

April 28, 2017

Permitted Investments Yield
 + 2.25%

 QUOTES 

Nick Frankland, CEO of Guy Carpenter, EMEA

“We are delighted to have successfully closed the issuance of the first ever indemnity based cat bond for Europe windstorm. This transaction has matched Generali’s specific needs to the current appetite of the capital markets in a ground breaking structure that provides them with unique coverage.” 

David Priebe, Vice Chairman of Guy Carpenter

“The continued remarkable convergence of capital markets capacity in the reinsurance market has continued into 2014 year-to-date and facilitated Generali’s inaugural use of capital markets-based risk transfer capacity. Generali’s prudent decisions in how to target the use of capital markets reaped them best execution.” 

Cory Anger, Global Head of ILS Structuring, GC Securities

“In addition to being the first indemnity triggered 144A Europe windstorm catastrophe bond and incorporating the latest structural features of the cat bond market, Lion I Re pioneers a new methodology to allow cedents to access the capital markets at any point the during calendar year but only pay an annual premium rate that adjusts to reflect the commensurate amount of risk contributed for such portion of a partial calendar year period. Such a feature opens the ability for cedents to access capital markets protection at a different time than their traditional renewal without paying excess premium. Additionally, defining Europe windstorm for the expansive European geography that was covered under the Lion I Re was carefully crafted in order to best extract such risk from an ongoing traditional reinsurance program and was fully accepted by the investor base. We are honored to have been selected to lead the structuring of, and jointly distribute the Lion I Re notes to facilitate Generali’s centralization and capital optimization objectives.” 

Chi Hum, Global Head of ILS Distribution, GC Securities

“Generali’s decision to sponsor Lion I Re ahead of other Europe windstorm issuances in the fall was rewarded with the broad-based and robust support of more than 20 investors that allowed the deal to be upsized and to be priced through the initial guidance. Additionally, the investor community recognizes Generali’s reputation as a premier global insurance company seeking to diversify its reinsurance capacity program to include capital markets and looks forward to continuing their support for future Generali issuances.”  

*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/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. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS.  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.  **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

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