Swiss Re Structures $138.6 Million Cat Bond for Groupama

October 6, 2010

Swiss Re’s Capital Markets unit announced that it has ‘successfully structured and placed €100 million [$138.6 million] of securities issued by Green Valley Ltd.,” covering windstorm events in France.

Green Valley is a special-purpose company incorporated under the laws of Cayman Islands. Swiss Re sponsored the transaction on behalf of French insurer Groupama S.A.

“This is the second series of principal-at-risk variable-rate notes issued by Green Valley,” the bulletin explained. “Proceeds of the issuance will serve to provide Swiss Re with a source of collateralized parametric index cover for a broader reinsurance agreement between Swiss Reinsurance Company and Groupama S.A.” Swiss Re Capital Markets was the sole bookrunner for the offering.

Groupama’s Chief Financial and Risk Officer, Christian Collin, expressed the Company’s appreciation for “the success of this issuance, which complements Green Valley series 1 for the next 15 months.” He added that Groupama intends to “develop a long term partnership with investors in this sector as cat bond coverage is now fully integrated into our reinsurance risk management strategy.”

The Class A Series 2 Principal At-Risk Variable Rate Notes are rated “BB+” by Standard & Poor’s and are scheduled for redemption in January, 2012. The collateral for this issuance consists of notes issued by the European Bank for Reconstruction and Development (EBRD).

Jean-Louis Monnier, Head of ILS Europe, indicated that Swiss Re was pleased to help support Groupama’s risk management strategy, and “optimize the risk transfer process and transaction execution as they access the capital markets for reinsurance capacity. He also indicated that, “increased transparency are paving the way for growth and a return of primary insurers in the European cat bond market.”

Risk Management Solutions Inc. performed the risk modeling and analysis as well as the triggers for the perils, “based on parametric indices.”

Source: Swiss Re

Was this article valuable?

Here are more articles you may enjoy.