Willis capital markets has acted as co-lead manager of an offering of $100m of notes linked to the occurrence of earthquakes in California.
The notes, which have been issued by Ajax Re as part of a $1bn shelf program, provide reinsurance protection to Aspen Insurance. Lehman Brothers acted as sole initial purchaser and bookrunner for the transaction.
The proceeds of the notes collateralize a reinsurance agreement between Ajax Re and Aspen. Loss payments under the reinsurance agreement are triggered by estimated insured property losses as reported by property claims services (PCS).
The notes, which were rated BB by Standard & Poor's and b+ by AM Best, have a coupon of Libor +625 basis points. The notes mature on 9 May 2009. The program allows Ajax Re to issue further series of notes to provide Aspen with up to $1bn of protection, in respect of any perils, at any given time.
Mark Hvidsten, chief executive of Willis capital markets, commented, “We are delighted to have acted as Co-Lead Manager of the Ajax Re notes issue. This transaction provides Aspen with catastrophe reinsurance at attractive terms. The ability to execute capital markets transactions is an essential part of the tool kit that enables us to provide our clients with the full spectrum of risk transfer solutions.”
Joe Plumeri, chairman and chief executive, Willis commented. “We are constantly developing ideas and innovative approaches to risk management in order to better serve our clients. Our sophisticated analytics and our proven ability to deliver all forms of risk transfer, including catastrophe risk securitizations, help us provide better solutions to our clients.”
