Aon Benfield Securities Completes Europe Windstorm Cat Bond Windmill I Re

January 23, 2014

Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, announced the successful completion of the first European Windstorm indemnity catastrophe bond for a European insurance sponsor.

The streamlined catastrophe bond, Windmill I Re Ltd., “provides Achmea Reinsurance Company N.V. with €40 million [$54.5 million] of collateralized protection against Europe Windstorm on an indemnity basis for a period of three years commencing January 1, 2014,” the bulletin explained.

Aon Benfield Securities acted as Structuring Agent and Placement Agent on the transaction, which covers windstorm events within the Covered Area of the Netherlands, Belgium, France, Germany, Portugal, Spain and the UK.

Roelant de Haas, Chairman of the Board of Directors at Achmea Re said: “We are very happy with the coverage secured via Windmill I Re Ltd., the first catastrophe bond sponsored by our company. It is not only our first catastrophe bond, but it is also indemnity based which was one of our conditions. This catastrophe bond received strong investor interest and provided our firm with AAA rated collateralized reinsurance protection at very efficient terms for a three-year period.”

Aon Benfield Securities CEO Paul Schultz commented: “The objective of this transaction was to secure efficiently-priced capital on terms substantially similar to the traditional reinsurance market. The streamlined offering also makes catastrophe bonds available in smaller notional sizes on an economical basis.”

In addition the announcement said:
• Initial modeling and Reset Agent services have been provided by Aon Benfield Analytics
• The underlying collateral for Windmill I Re has been invested in Euro-denominated government money market funds
• The Notes will not be rated

“The Windmill I Re Ltd. €40,000,000 Series 2013-1 Class A Principal At-Risk Variable Rate Notes were priced at 3.25 percent above the return on the underlying money market fund collateral. The Notes have a three year Loss Occurrence Period running from January 1, 2014 to December 31, 2016 with a scheduled maturity date of January 5, 2017.”

Source: Aon Benfield Securities

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