Chartis, formerly known as AIU Holdings, is preparing and marketing it’s first catastrophe bond issuance. The transaction is being issued by Chartis for it’s National Union Fire Insurance subsidiary in the U.S.
Lodestone Re Ltd. is a Bermuda based SPV set up for the specific purpose of issuing $250m worth of insurance-linked securities to provide Chartis’ subsidiary with a source of reinsurance against both U.S. windstorms and earthquakes. This deal has the potential to grown beyond $250m as we here from market sources that investors are looking favorably at it.
The deal has been structured into two tranches. Standard & Poor’s have given the Series 2010-1 Class A notes a ‘BB+’ preliminary rating and the Class B notes a ‘BB’ preliminary rating.
If successful we’d hope to see Chartis and it’s subsidiaries return to the catastrophe bond market as utilising the capital markets could provide a valuable source of additional capacity to the group.
We don’t have any further details on Lodestone Re yet but as they come to light we will add them to our catastrophe bond Deal Directory.