Hurricane cat bonds hit $1.8bn

Nationwide Mutual has missed its £200m target and closed at its US hurricane and earthquake catastrophe bond at $185m, pushing the year's total issuance to $1.8bn, Reuters reports.

Caelus Re is the eighth bond to close before the start of the US wind season. The Class A notes have been rated BB+ by Standard & Poor's and will use US money market funds for its collateral solution. The bond is the second US hurricane and earthquake bond to be issued in the series.

Goldman Sachs and Aon Benfield Securities helped to structure and arrange the bond, while the risk modelling for hurricane loss estimates will be based on AIR Worldwide Corp.'s (AIR) hurricane model.

Cat bond totals

Swiss Re expects issuance to exceed $2bn for the first half of 2010 prior to the US wind season, which commences June 1. This is compared to an issuance total of $1.4bn for the same period last year.

USAA is marketing its four-tranche US multi-peril bond at $500m. Each tranche has a target size of $125m. Classes 1 to 3 of the bond are calculated on a per-occurrence basis and have been rated BB, B+, and B- by Standard and Poor's (S&P). The fourth tranche is based on annual aggregate and was not submitted to S&P, and will not be issued with a rating.

Allianz's third offering in its US hurricane and earthquake cat bond programme is expected to settle today. Blue Fin Ltd has been assigned a B- credit rating for the $100m Class A notes, and a BB rating to the $50m Class B notes.