Mayer Brown, one of the worlds leading law firms providing services to the insurance-linked securities sector, have issued a press release on their role in the recent $150m securitization of earthquake risk by the California Earthquake Authority (CEA) through their Embarcadero Re Ltd. Bermuda domiciled reinsurer. This ground-breaking deal completed recently to much interest from the sector and outside parties who see the value in this kind of direct risk transfer. The full press release follows below.
Mayer Brown serves as lead deal counsel on ground-breaking catastrophe bond issuance
5 August, 2011 – Mayer Brown, a leading global law firm, served as lead deal counsel for Embarcadero Re, the issuer of a $150 million catastrophe bond that collateralizes a reinsurance agreement with the California Earthquake Authority (CEA).
The firm also represented Deutsche Bank Securities, sole structurer and bookrunner for the sale of the bonds to investors. While Mayer Brown was originally retained by Deutsche Bank as R&D and structuring counsel, the team’s role shifted to issuer’s and lead counsel.
The transaction demonstrates that the cost of catastrophe bond coverage can be comparable to or lower than equivalent reinsurance coverage. The issuance is also significant because the status of the CEA as a state agency raised several novel issues that required innovative solutions.
Lawyers from Mayer Brown’s Banking & Finance practice and Insurance Industry Group advised on the catastrophe bond issuance. The team included: Insurance Industry Group partners Kenneth Pierce, Keith Andruschak and Christopher Horn (all New York) and Banking & Finance partner Paul Forrester (Chicago).