East Japan Railway Company has secured $260 million in earthquake coverage through a securitization bond placed by Munich Re utilizing Aon Corp.'s investment banking group Aon Capital Markets, the two companies said.

According to Munich Re, the bond gives the railway company coverage in case of a major earthquake in greater Tokyo. The program not only covers property losses but also business interruption losses, which Munich Re said is difficult to obtain from Japan's insurers.

"This transaction has combined reinsurance and capital markets to provide a unique capacity to our client," said Paul Schultz, president of Aon Capital Markets, in a statement.

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