GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of the Principal At-Risk Notes, with notional principal of $100,000,000, through a newly formed catastrophe bond, Queen Street IX Re Limited, to benefit Munich Re. This is the ninth Queen Street cat bond to benefit Munich Re, the eighth overall cat bond issuance benefitting Munich Re since 2011 and the first cat bond issuance benefitting Munich Re provided via an Irish special purpose reinsurance vehicle.
The Principal At-Risk Notes provide three seasons of per occurrence protection for named storms affecting the United States and for cyclones affecting Australia. This protection priced approximately 15% lower than the similarly structured Queen Street VIII Limited that was placed in June 2013 demonstrating the robust demand for catastrophe bonds.
GC Securities served as sole bookrunner on Queen Street IX Re Limited. GC Securities has raised $600M of catastrophe bond protection for Munich Re since 2011 through the offering of six of the nine Queen Street catastrophe bonds issued.
Principal At-Risk Variable Rate Notes due June 8, 2017
June 8, 2017
TMMF Earnings + 5.50%
David Priebe, Vice Chairman of Guy Carpenter and Head of GC Securities, said “Munich Re’s ability to optimize its hedging opportunities in these improved market conditions was again exemplified by the Queen Street IX Re Limited cat bond issuance. GC Securities is honored to have assisted Munich Re in the offering of the Notes.”
Cory Anger, Global Head of ILS Structuring, GC Securities, added “Munich Re’s ability to offer a cat bond with a favorable peril mix of Australia cyclone paired with US hurricane in a transparent non-indemnity format at a risk layer that offers higher spread was the catalyst to the tremendous support that the capital markets provided. Queen Street IX was one of the broadest cat bond placements with respect to investor interest and the final number of participating investors thereby allowing Munich Re to receive best execution to support application of cat bond protection to a multi-peril transaction that includes a non-peak peril.”
Chi Hum, Global Head of ILS Distribution, GC Securities, said “The capital markets capacity continues to grow and combined with a strong interest in diversifying cat risks has presented a market opportunity for catastrophe bond issuers that was very much a benefit to Munich Re’s Queen Street IX Re deal. A higher risk return profile relative to other market offerings also facilitated good execution at an attractive price for this capacity. The market recognizes and continues to support the Queen Street series of catastrophe bonds from this sophisticated capital markets issuer and we at GC Securities are pleased to have brought this to market on behalf of Munich Re.”
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*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.