GC Securities* Completes First Ever Swiss Franc-Denominated Private Catastrophe Bond (“Gurten”) Benefitting Gebäudeversicherung Bern
GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the Regulation S placement of Principal At-Risk Variable Rate Notes (”Notes”) due January 15, 2016, with notional principal at CHF70,000,000 through Kaith Re Ltd., to benefit Gebäudeversicherung Bern (”GVB”). This is the first ever Swiss franc-denominated catastrophe bond and the first time that GVB has utilized the cat bond market to manage its risks.
Kaith Re is a Bermuda exempted company registered as a Class 3 insurer in Bermuda under the Insurance Act 1978 of Bermuda and registered as a segregated account company under the SAC Act, acting in respect of its segregated account designated Leine Re, to benefit GVB. The protection provided to GVB via the Gurten private catastrophe bond is positioned alongside traditional reinsurance on each layer of GVB’s traditional reinsurance program. It provides one year of annual aggregate protection to GVB on identical coverage terms to its traditional reinsurance program.
The active involvement of the key participating investment managers (LGT ILS Partners Ltd. and Schroders Investment Management [Switzerland] AG) early in the process streamlined the catastrophe bond implementation to efficiently provide GVB with a capital markets-based solution covering Swiss natural peril catastrophe risk that is highly competitive to the traditional reinsurance placement.
GC Securities served as sole placement agent.
Patrick Lerf, Chief Financial Officer, GVB: “GVB appreciates the assistance of GC Securities, Kaith Re and the investors in successfully completing our first catastrophe bond. This transaction demonstrates our ongoing commitment to provide financial security to our policyholders.”
Frank Achtert, Head of Capital Optimization - Strategic Advisory EMEA, Guy Carpenter & Company GmbH: “This transaction exemplifies the continued application of alternative capital to the European insurance and reinsurance communities and the successful result of Guy Carpenter bringing cedents together with investors.”
Cory Anger, Global Head of ILS Structuring, GC Securities: “We are delighted to have facilitated GVB’s first catastrophe bond transaction and pioneered the first Swiss franc-denominated catastrophe bond. This private catastrophe bond transaction demonstrates the growing application of alternative capital to insurers, reinsurers, sovereigns and corporates globally as well as the ability for capital markets investors to provide meaningful capacity with coverage terms (including for non-modeled perils) consistent with the traditional reinsurance markets.”
*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.