Munich Re provides capital-markets solution for North Carolina Underwriting Associations – US$ 201.835m hurricane catastrophe bond issued
Munich Re has provided for the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association (collectively the NC JUA/IUA) a US$ 201.835m, two-class issuance from the Johnston Re catastrophe program. NC JUA/IUA first tapped the capital markets for cover using Johnston Re Ltd. in May 2010 for US$ 305m cat bond cover and they have now returned to the market for a Series 2011-1 issuance providing additional per occurrence ultimate net loss protection for North Carolina hurricane peril.
Munich Re acted as joint lead manager in the transaction and Munich Reinsurance America, Inc. (Munich Re America) has reinsured a portion of two catastrophe risk layers of the NC JUA/IUA, which have been fully retroceded to Johnston Re Ltd., a licensed Class B insurer in the Cayman Islands. Johnston Re Ltd. has issued US$ 70m Series 2011-1 Class A Principal At-Risk Variable Rate Notes (Class A Notes) and US$ 131.835m Series 2011-1 Class B Principal At-Risk Variable Rate Notes (Class B Notes), both due May 8, 2014.
"With the Johnston Re transaction, we have succeeded – as we did last year – in obtaining for a major US client additional coverage for hurricane risks in the capital markets. The transaction again underlines the role of the capital markets as an additional capacity provider for peak risks such as hurricane risks in North Carolina", said Tony Kuczinski, President and CEO of Munich Re America.
This press release is prepared for the purpose of public announcement of the insurance solution provided by Munich Re in connection with the issuance of the bonds referred to herein (the "Bonds") and does not constitute or form part of any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities in any jurisdiction, nor shall it (or any part of it) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment therefore.
All of the Bonds have been sold and this announcement is a matter of record only. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state or foreign securities law and the issuer is not and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act").
The Bonds were offered and sold only to investors who are qualified institutional buyers in accordance with Rule 144A under the Securities Act and who, in the case of U.S. persons (as the term is defined in Regulation S under the Securities Act), are also qualified purchasers for purposes of Section 3(c)(7) of the Investment Company Act and may not be re-offered or re-sold except in compliance with all applicable transfer restrictions. Any purported transfer in violation of those restrictions will be null and void. In addition, the Bonds may be held only in certain permitted jurisdictions.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of Munich Re. Munich Re assumes no liability to update these forward-looking statements or to conform them to future events or developments.