More cat bonds to follow since Scor’s $200m February issue
US property and casualty insurer Chubb has sold a $150m catastrophe bond, the second such deal this year, Reuters has reported.
The three-year bond matures on 16 March 2012 and was issued via East Lane Re III, a special purpose vehicle based in the Cayman Islands. It pays investors a coupon of 10.25% over three-month Libor.
The bond covers losses in excess of $850m caused by Florida hurricanes.
In February, when French reinsurer Scor sold a $200m catastrophe bond via special purpose vehicle Atlas V.
Like Scor's deal, East Lane Re III includes strict rules on how the collateral backing the bonds is invested.
Chubb's new East Lane Re III bond was placed privately with institutional investors, some of whom said it had been over-subscribed. Pricing was said to be at the higher end of a range.
Catastrophe bond issuance is expected to pick up this year following a squeeze in the market for retrocession, the passing on of reinsurance risks to other reinsurers, where prices have risen about 30% in the last six months.
Liberty Mutual, the sixth-largest US property and casualty insurer, is marketing a new $200m catastrophe bond, via special purpose vehicle Mystic Re II to cover losses from US hurricanes and earthquakes.
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