Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, announces today that the investment banking group of its affiliate, Aon Benfield Securities, successfully completed the private placement of Eurus II – a €150m European windstorm catastrophe bond. The notes were issued by Eurus II Ltd., an exempted company in the Cayman Islands established for this transaction.
The placement of the principal at-risk variable rate notes provides reinsurer, Hannover Re, with fully collateralized catastrophe protection for Europe windstorm risk across seven EU countries: Germany, France, the United Kingdom, Ireland, the Netherlands, Belgium and Denmark.
The bond was placed with investors in Europe and North America, and Aon Benfield Securities was a joint placement agent for the Rule 144A transaction.
Paul Schultz, President of Aon Benfield Securities, said: “We are pleased to complete our sixth insurance linked securitization since the re-emergence of the cat bond primary issuance market in February 2009. The capital markets continue to offer our clients additional capacity that complements traditional reinsurance, and large buyers of catastrophe reinsurance worldwide are utilizing this source of capital.”
The transaction was structured with a parametric index trigger, providing recoveries based on wind speed as measured at 233 METAR weather reporting stations located throughout the seven countries in northern Europe. This was the first issuance under the Eurus II shelf program.
AIR Worldwide Corporation provided the risk modeling and analysis for this transaction. The notes were priced at EURIBOR plus 6.75 percent with a maturity of 6 April 2012 and rated BB by Standards and Poor’s.
“The deal was oversubscribed, enabling Hannover Re to increase the issuance size and achieve attractive pricing. The non-US risk and simple parametric index structure proved to be very appealing to investors,” added Schultz.
