Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Newton Re Ltd. (Series 2008-1)

The Artemis Catastrophe Bond and Insurance-linked Securities Deal Directory aims to provide a one-stop resource for information on every cat bond and ILS transaction we hold information on. The content of this Deal Directory is provided as is and there will be some omissions. Help us to keep these cat bond and ILS transaction summaries up to date by contacting us if you see an error or omission that you can correct.


Newton Re Ltd. (Series 2008-1) – At a glance:

  • Issuer: Newton Re Ltd. (Series 2008-1)
  • Cedent / sponsor: Catlin
  • Placement / structuring agent/s: Willis Capital Markets acted as co-lead manager with Lehman Brothers.
  • Risk modelling / calculation agents etc: RMS
  • Risks / perils covered: U.S. hurricane, U.S. earthquake, European windstorm, Japan typhoon, Japan earthquake
  • Size: $150m
  • Trigger type: Indemnity
  • Ratings: S&P: 'BB'
  • Date of issue: Feb 2008
  • news coverage: Articles discussing Newton Re Ltd. (Series 2008-1) from
  • Other coverage: Link to external coverage

Newton Re Ltd. (Series 2008-1) – Full details:

This transaction is unusual as it provides retrocessional ‘catastrophe bond’ type coverage for a diverse portfolio of property catastrophe exposures on an indemnity basis. As it would be triggered by Catlin’s actual losses, it reduces the basis risk present in most index-based or parametric-based catastrophe bond products.

The coverage, which expires on 31 December 2010, will be triggered if Catlin’s losses from defined US windstorms and earthquakes, European windstorms, and Japanese windstorms and earthquakes exceed an annual aggregate threshold amount.

In the transaction, which was completed on 21 February, Catlin has entered into a reinsurance agreement with Newton Re Limited, a special purpose reinsurer established in the Cayman Islands. Newton Re in turn has issued US$150 million of principal at-risk variable rate notes, the proceeds of which will be used to provide collateral for Newton Re’s obligations to Catlin under the reinsurance agreement.

The risk analysis relating to the transaction has been performed by Catlin, which will also perform similar analyses during the subsequent years of the agreement. Risk Management Solutions Inc. has and will continue to review the analysis provided by Catlin.

The notes, which were rated ‘BB’ by Standard & Poor’s and have a coupon of Libor plus 750 basis points.

The collapse of the Lehman Brothers in 2008 left the Class A tranche of Newton Re Ltd. (Series 2008-1) notes without a viable total return swap counterparty. The deal matured on the 7th January 2011 but failed to make a final payment to noteholders. Instead of receiving the full payment some of the noteholders of Newton Re accepted an assignment of the collateral in its place. As a result, rating agency A.M. Best decided that the failure to pay constituted a default as Newton Re Ltd. failed to meet its financial obligations to the noteholders.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

« Go back to the Catastrophe Bond Deal Directory

Help us keep this valuable resource up to date. If you have information on a catastrophe bond or insurance-linked security deal we have not covered or can see something that we should change, please contact us to let us know.