Aon Capital Markets places $225 million earthquake and hurricane cat bonds
– 21 December 2007
Aon Corporation’s investment banking group, Aon Capital Markets, has completed the private placement of $225 million of principal at-risk variable rate notes for Newton Re Limited in two separate classes of notes.
The placements provide Catlin Insurance Company Ltd. with fully collateralized catastrophe protection of $87.5 million for US earthquake risk and $137.5 million for US hurricane risk.
The $87.5 million of Class A Notes are exposed to US earthquake events and the $137.5 million of Class B Notes are exposed to US hurricane events. The notes were issued by Newton Re Limited, a Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands.
Risk Management Solutions, Inc. provided the risk modelling and analysis for this transaction.
For each class of notes, a risk transfer contract provides formula-driven recovery, which takes into consideration specific payout factors multiplied by the industry loss amount applicable to a covered event as published by the Property Claim Services.
Aon Capital Markets and J.P. Morgan Securities Inc were joint lead placement agents.
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