Munich Re again acquired cover for natural catastrophe exposure at capital market

2016/05/24

Munich Re has again acquired capital market capacity providing cover for natural catastrophe exposure in its book of reinsurance business. The cover is provided through a new catastrophe bond transaction – Queen Street XII.

Munich. Using the special purpose vehicle Queen Street XII Re dac (“designated activity company”), Munich Re has acquired coverage with a total volume of US$ 190m for US hurricane and European windstorm risks. The transaction is comparable to previous Queen Street transactions. The notes – which will mature on 8 April 2020 – have been issued by Queen Street XII Re dac, a reinsurance vehicle registered in Ireland. Queen Street XII Re dac is the first special purpose vehicle authorised for the purposes of the Solvency II Directive in the 144A catastrophe bond market. The risk modelling has been developed by AIR Worldwide. With this transaction, Munich Re obtains relief for losses from extreme events with a statistical return period of between 30 and 50 years. As the collateral solution, the structure uses a medium-term note of the International Bank of Reconstruction and Development (IBRD) specifically structured and issued for this transaction. The bond has a variable rate of interest based on the risk premium, equal to 5.25% per annum, and the yield paid from the IBRD Note.

Board member Thomas Blunck said: “This transaction slightly increases the cover for natural catastrophe exposure and its diversification in our books at conditions which are at the same time attractive for investors.”

Munich Re has structured and arranged the transaction, with GC Securities acting as sole bookrunner.

Disclaimer
This corporate news 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 our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.

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Disclaimer

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.

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