Munich Re provides capital-markets solution for North Carolina Underwriting Associations
Munich Re has provided for the North Carolina Joint Underwriting Association and North Carolina Insurance Underwriting Association a US$500m catastrophe bond transaction that transfers named storm (tropical cyclones) risk in North Carolina to the capital markets. Munich Re acted as co-structurer and co-lead manager in the transaction and reinsured the risk via its US operation.
Munich Re America has reinsured a named storm risk layer of the NCJUA/NCIUA which has been fully retroceded to Bermuda-registered special purpose insurer Tar Heel Re Ltd., providing coverage of up to a maximum of US$500m on an annual aggregate ultimate net loss basis. Tar Heel Re Ltd. has issued principal at-risk variable rate notes with a 3-year risk period, due May 9, 2016.
The bond has a variable rate of interest based on the risk premium and yield paid from a fund which collateralises the catastrophe bond. This fund investing in short-dated US treasury bills 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 8.50% p.a. Lead structurer, co-lead manager and sole bookrunner in the transaction was GC Securities.
“This is the third time we have succeeded in obtaining additional coverage for this major US client in the capital markets. The transaction underscores how Munich Re offers its clients the full spectrum of risk transfer solutions,” said Tony Kuczinski, President and CEO of Munich Re America.
Munich, den 17. April 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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