Nationwide Mutual closes Caelus Re II cat bond at $185m

by Artemis on June 6, 2010

Nationwide Mutual has successfully closed it’s second catastrophe bond deal under it’s Cayman Islands SPV Caelus Re. Caelus Re II Ltd. is designed to provide Nationwide with three years of indemnity cover on a per-occurrence basis against hurricanes and earthquakes within the U.S.

Initial reports on this catastrophe bond suggested it was aiming for $200m but the deal finally closed at a slightly lower $185m. This despite being well received by investors before the hurricane season began, there has been a slight contraction in investment capacity over the last two weeks.

Goldman Sachs and Aon Benfield Securities assisted with the structuring of the deal as co-lead managers. AIR Worldwide provided risk modelling services.

The transaction utilises highly rated U.S. money market funds as a form of collateral.

Standard & Poor’s rated the Class A notes of the deal ‘BB+’.

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