GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, announced the placement of the Series 2015-1 Notes, with notional principal at $100,000,000, through a newly formed Bermuda domiciled catastrophe bond shelf program, Pelican III Re Ltd., to benefit Louisiana Citizens Property Insurance Corporation (“LA Citizens”). This is the third time that LA Citizens has utilized the cat bond market to manage its tropical cyclone risks.
The Series 2015-1 Notes are positioned alongside traditional reinsurance of LA Citizens’ reinsurance program to provide per occurrence protection from tropical cyclone-related losses. The Series 2015-1 Notes replaces LA Citizens’ maturing catastrophe bond protection by providing three years of risk transfer protection at 56 percent price reduction and improved structural features, including broader definition of Named Storms, addition of a liquidity feature to advance the next 30 days’ worth of expected claims payments and increased flexibility with respect to the annual reset option.
GC Securities served as sole structurer and sole bookrunner.
Series 2015-1 Notes
Class A Notes
April 16, 2018
TMM earnings + 6.00%
Steve Cottrell, Chief Financial Officer, Louisiana Citizens Property Insurance Corporation, stated, “Louisiana Citizens Property Insurance Corporation was very pleased with the investor demand for our catastrophe bond, Pelican III Re. Catastrophe bonds are an important part of our total reinsurance strategy.”
David Priebe, Vice Chairman of Guy Carpenter, added, “This transaction exemplifies the benefit of the convergence between the reinsurance and capital markets and demonstrates the value that Louisiana Citizens achieved in utilizing the catastrophe bond market to meet its risk transfer needs. GC Securities is honored to have assisted LA Citizens in the offering of the Series 2015-1 Notes.”
Cory Anger, Global Head of ILS Structuring, GC Securities, stated, “We are honored to have brought LA Citizens back to the catastrophe bond market and delivered further reinsurance program savings for LA Citizens and its constituents. In addition to complementing LA Citizens’ traditional reinsurance program and continuing to diversify its risk transfer capacity sources, the Series 2015-1 bonds (as well as the Pelican III Re shelf program) provide the latest structural features to LA Citizens.”
Chi Hum, Global Head of ILS Distribution, GC Securities, added, “The capital markets support for LA Citizens was broad and a strong endorsement for this well-structured, residual market capacity program. The market rewarded the efforts by LA Citizens and the broker team to find the optimal mix of capital markets and traditional reinsurance. LA Citizens should take this as a signal of the continuing future support that the capital markets can and will provide going forward. GC Securities thanks LA Citizens and the capital markets investors for the successful execution of the series 2015 Pelican bond issuance.”
*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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