Swiss Re today announced the transfer of USD 175 million of extreme mortality risk to the capital markets through the Vita securitization programme.
This is the third time in the last 12 months that Swiss Re has successfully securitized extreme mortality risk under its latest Vita Capital IV Ltd. programme (“Vita IV”), with a total of USD 125 million issued in Series I and II in November 2009 and May 2010.
Swiss Re’s Head of Global Life & Health Risk Transformation, Alison Mckie, commented: “The Vita programme provides very efficient risk protection and capital relief, enabling us to provide more client solutions.”
Under the transactions, Swiss Re may receive payments from Vita IV of up to USD 100 million in the event of extreme population mortality in the U.S. or Japan and up to USD 75 million in the event of extreme population mortality in Canada or Germany. Vita IV, in turn, has issued two new Series of notes, Series III and IV Notes, to the capital markets, each of which is linked to extreme mortality risk in the respective covered areas. Both series of notes mature in 2015 and are rated “BB+ (sf)” by Standard & Poor’s.
“While Series I and II provided coverage in the UK and U.S., the latest issuance of Vita IV notes broadens the coverage by including additional countries, reflecting Swiss Re’s global mortality business,” added Mckie.
Swiss Re has a history of periodically securitizing its life risks, obtaining over USD 1.5 billion in extreme mortality risk protection from its Vita programmes.
Swiss Re Capital Markets acted as sole manager and bookrunner on the notes issuance. Collateral for the new Series of Vita IV notes consists of securities issued by the International Bank for Reconstruction and Development.
The Vita IV notes were sold in a private placement pursuant to Rule 144A of the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
Source : Swiss Re Press Release
