Munich Re again helps to provide an earthquake protection solution for Zurich Insurance Group
Munich Re has assisted Zurich Insurance Group in a US$ 270m catastrophe bond transaction that transfers the risk of earthquakes in North America to the capital markets. Munich Re acted as joint lead structuring agent in the transaction.
The bond with a three-year period was issued by Bermuda registered Lakeside Re III Ltd., replacing the expiring US$ 225m Lakeside Re II Ltd. transaction issued in December 2009. The bond has a variable rate of interest based on the risk premium and yield paid from a US money market fund which collateralises the catastrophe bond. Proceeds will be initially invested in the MEAG Lakeside Re III fund which has been established for this cat bond by Munich Re’s asset manager MEAG.
The catastrophe bond has received a rating of B+ (sf) from Standard & Poor's, and the risk premium is 8.00% p.a. The bond provides coverage for the Zurich Insurance Group on an annual aggregate basis against earthquake losses in selected territories in North America. Second joint lead structuring agent and sole bookrunner in the transaction was Swiss Re.
“We are pleased to have again assisted our client Zurich Insurance Group with a capital markets transaction. Munich Re offers its clients the full spectrum of risk transfer solutions. Investors continue to appreciate the diversifying effect from cat bonds that are virtually uncorrelated with trends on the capital markets”, said Thomas Blunck, member of Munich Re’s Board of Management.
Munich, 3 Januar 2013
Aktiengesellschaft in München
This press release is prepared for the purpose of public announcement of 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 in the United States 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.
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