Munich Re Places $70M Non-U.S. Cat Bond

NU Online News Service, June 9, 2:36 p.m. EDT

Munich Re said it has issued a EUR50 million (U.S. $70 million) catastrophe bond to transfer European winter storm and Turkish earthquake risks to the capital markets.

The Munich, Germany-based reinsurer said the sale would provide relief for "extreme event losses with a statistical return period of 75 years per each peril."

The bonds are rated "B2" "Poor" by Moody's Investor Services and have a three year term.

Risks covered under the bond include windstorms in the United Kingdom, Ireland, France, Belgium, the Netherlands, Denmark and Germany, and the transfer of earthquake risks in Turkey on behalf of a client, the Turkish Catastrophe Insurance Pool.

Munich Re said the bond, "Ianus Capital," is the first catastrophe bond covering non-U.S. risks to be issued in 2009, following a period of inactivity caused by the collapse of Lehman Brothers.

It is also the first time Munich Re has combined risk transfer on behalf of a client with the placement of risks from its own book of business.

The risk model for the bond was developed by the modeling firm EQECAT. The transaction was structured and arranged by Munich Re.

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