Posted By Gbaf News
Posted on April 10, 2012
First take-down under Blue Danube with a volume of USD 240 million / Catastrophe bond covers US, Caribbean, and Mexican hurricane as well as US and Canadian earthquake risks / Largest US catastrophe bond transaction sponsored by Allianz to date
The three-year term Series 2012 catastrophe bond was issued in two tranches of 120 million US-dollars each by Blue Danube Ltd., a newly established Bermuda special purpose vehicle. It offers investors an interest spread of 6.00 percent and 10.75 percent over the permitted investments yield for the Class A and Class B notes, respectively. The Series 2012 bond protects Allianz against the risk of loss from certain hurricane events in the US, Caribbean, and Mexico as well as certain earthquake events in the US and Canada. The transaction is based on a modified industry loss trigger. The Class A notes have received a rating of “BB+ (SF)”, and the Class B notes a rating of “BB- (SF)” by Standard & Poor’s. Both tranches were significantly oversubscribed and up-sized from the originally announced volume of 100 million US-dollars per tranche.
The Blue Danube Series 2012 issuance partially replaces expiring cover under Allianzf Blue Fin catastrophe bond program but also includes some new features. For example, through the addition of Canadian earthquake as well as Caribbean and Mexican hurricane risk, it protects risks which are not common in the insurance linked securities market.
“This expansion of perils protected through Blue Danube Series 2012 allows us to better fulfill our risk management requirements. It aligns the scope of the cat bond protection with other forms of cover Allianz regularly relies on,” says Olaf Novak, CRO of Allianz Re, the reinsurance division of Allianz SE, which is responsible for structuring the transaction for the Allianz Group.
Over the past 5 years, Allianz has returned regularly to the catastrophe bond market underlining its commitment to all markets for natural catastrophe protection.
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