(Bloomberg) -- Amtrak obtained $275 million of natural-disasterprotection from fixed-income investors in the first catastrophebond for the U.S. long-distance passenger railway.

Marsh & McLennan Cos.’ GC Securities joined GoldmanSachs Group Inc. as bookrunners and initial purchasers of the debt,Amtrak said Wednesday in a statement. The bonds will help protectAmtrak if a catastrophe damages infrastructure in the corridor fromBoston to Washington.

Insurers and reinsurers typically sell catastrophe bonds toinvestors to help cover extreme hazards, and buyers of thesecurities get above-market interest rates for taking the risk thatthey could lose principal in the event of a qualifying disaster.Amtrak’s coverage would protect against storms similar to Sandy in2012, when sea water flooded New York tunnels, causing more than $1billion in damage, according to the statement.

“This is the first time Amtrak has used the capital markets tobroaden our base of insurance coverage,” Chief Financial OfficerGerald Sokol Jr. said in the statement. “The catastrophe bondmarket provides us with a means to diversify our sources ofinsurance in a cost-effective manner.”

The coverage, issued through a Bermuda-based special- purposeentity known as PennUnion Re Ltd., will protect againstextreme storm surge, wind and earthquakes. The bonds yield 4.5percentage points more than the benchmark and mature in late 2018,according to data compiled by Bloomberg. Advisers on the dealincluded RMS Inc., a catastrophe-risk modeling firm, and MayerBrown LLP.

Support from more than 25 investors “allowed the transactionsize to be increased by 37.5 percent from the initial offering sizewhile at the same time pricing at the lowest end of priceguidance,” Chi Hum, global head of insurance-linked securitiesdistribution at GC Securities, said in a separate statement.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.