Domestic Inc. – Full details:
Insurance linked security providing cover for mid-west and New Madrid fault earthquakes. Triggered when Kempers losses exceed certain level.
The floating rate notes have been rated BB+ by Standar & Poors.
Kemper Insurance issued $100 million of three-year catastrophe bond notes through a U.S. domiciled special-purpose vehicle Domestic Inc.
The offering marks the first time that a cat bond has been issued inside the U.S., which may explain why the deal was heavily oversubscribed and priced at the tight end of market talk, according to David Reilly, a director at Aon Capital Markets in Chicago, which solely underwrote the offering.
The deal was sold to 30 institutional investors, some of which may have been unwilling to buy a non-U.S. issue