Munich Re again transfers European windstorm risks to the capital markets through the new "Queen Street" programme, thus securitising frequency losses for the first time
Munich Re has issued a €170m catastrophe bond through a newly established programme. Following on from previous Munich Re transactions, peak windstorm risks are again being placed on the capital market, via a first tranche with a volume of €100m. Standard & Poor’s has given the tranche a B rating.
A second tranche with a volume of €70m securitises windstorm frequency losses (so-called aggregate XL) for the first time. The aggregate XL tranche was given a BB+ rating by Standard & Poor’s. Member of the Board of Management Dr. Thomas Blunck: "This provides relief for Munich Re when several moderately severe windstorms occur in any one year. Among our clients we also see a growing demand for such coverage of frequency losses. The Queen Street bond programme can therefore be deployed quickly and cost-effectively for our clients too."
The bonds issued by Queen Street Ltd. are variable rate notes with a term of three years. For the first time, a substantial part of the securities – more than €50m – was placed with investors in the European Union and in Switzerland via the Munich Re subsidiary Munich Re Capital Markets.
"Catastrophe bonds with their transparent and uncorrelated risks are currently in big demand among investors in view of the credit market crisis", said Blunck.
Munich, 19 March 2008
gez. Dr. Blunck gez. Dr. Lawrence
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