Western Capital Ltd.
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Western Capital Ltd. - At a glance:
- Issuer / SPV: Western Capital Ltd.
- Cedent / Sponsor: California Earthquake Authority
- Placement / structuring agent/s: Swiss Re Capital Markets Corporation (SRCM) and Goldman, Sachs & Co. Swiss Re provided the reinsurance layer.
- Risk modelling / calculation agents etc: EQECAT
- Risks / Perils covered: California earthquake risks
- Size: $100m
- Trigger type: Industry loss index
- Ratings: S&P: 'BB+'
- Date of issue: Feb 2001
Western Capital Ltd. - Full details
The California Earthquake Authority (CEA) have arranged a combination of reinsurance and investment capital to arrange $100 million that will be available to CEA policyholders in the event of one or more major earthquakes over the next 23 months.
The CEA signed a $100 million reinsurance contract with Swiss Re. Swiss Re Capital Markets Corporation (SRCM) and Goldman, Sachs & Co. co-led a private offering and jointly placed $97 million of floating rate notes and $3 million of preference shares that, in effect, will replenish Swiss Re’s capital should such an earthquake occur.
The floating rate notes have been rated BB+ by Standard & Poor’s and Ba2 by Moody’s. The issuer, Western Capital Limited, is a Bermuda special purpose vehicle whose common shares are held in trust. Payout of the notes is linked to an index of California earthquakes as determined by the Property Claim Services (PCS).
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