Latest Residential Reinsurance 2010 cat bond issuance upsizes at close to $300m

by Artemis on December 2, 2010

USAA’s latest catastrophe bond issuance, a second series of notes under it’s Cayman Islands based SPV Residential Reinsurance 2010 Ltd., has now closed. The transaction upsized by $100m before close and in total provides USAA with another $300m of multi-peril cat bond cover.

Only one tranche of this new Series 2010-II issuance has been rated by Standard & Poor’s. The $210m Class 1 Series 2010-II notes (which upsized from the originally marketed $110m) have been rated ‘BB’ by S&P. The other two tranches of notes have not been rated but are comprised of $50m Class 2 Series 2010-II notes and $40m Class 3 Series 2010-II notes.

The deal provides USAA with two and a half years cover against hurricane, earthquake, severe thunderstorm, winter storm and wildfire exposures in the U.S. The deal is due to mature in June 2013.

It’s encouraging to see that a deal involving U.S. wind risks has seen enough demand to upsize significantly. This should encourage other sponsors for any forthcoming issuances.

For full details of this issuance, which follows the same structure as the first Residential Re 2010 cat bond, see our Deal Directory.

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