Avondale Securities life insurance-linked securities placed on watch for downgrade


The life insurance-linked security notes issued by Avondale Securities on behalf of the Bank of Ireland’s life insurance subsidiary New Ireland Assurance, have been placed on review for possible downgrade by ratings agency Moody’s.

The notes issued in 2007 by Avondale Securities, a special purpose vehicle set up in Luxembourg by the Bank Of Ireland, were designed to transfer a block of life insurance risk to the capital markets through securitisation. €400m of notes were issued in this transaction and were sold to investors.

Due to the economic difficulties being faced by Ireland and its banks and the fact that Moody’s has already placed Bank Of Ireland on review for possible downgrade, the two tranches of notes in this insurance-linked securitisation have also been placed on review. Moody’s sees a potential for shortfall on the value in force (VIF) of the book of securities associated with this transaction.

The current economic climate serves as a reminder that while insurance-linked securities are generally non-correlated with the wider financial markets, once the companies involved in transactions come into difficulty the correlation is suddenly apparent again.

Moody’s has full details in a press release.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.