Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Munich Re completes Queen Street VI catastrophe bond, notes get rated


The first catastrophe bond of the third-quarter, Queen Street VI Re Ltd. a U.S. hurricane and European windstorm cat bond from Munich Re, has now completed successfully, been rated by Standard & Poor’s and listed on the Bermuda Stock Exchange. Munich Re’s sixth Queen Street cat bond deal was slightly unusual as it is rare to see U.S. hurricane risk issued in a cat bond during the season, but it has successfully issued the $100m single tranche of notes that Munich Re was seeking.

Queen Street VI Re Ltd. is a Bermuda domiciled special purpose insurer formed for the dual purpose of entering into a retrocession reinsurance contract with Munich Re and issuing cat bond notes on their behalf. The $100m of notes issued by Queen Street VI Re are designed to provide Munich Re with a three-year source of reinsurance protection against U.S. hurricanes and European windstorms on an industry loss basis.

As we wrote a week ago the notes priced below the lower end of the expected range. When the deal began marketing the notes were expected to pay a coupon to investors in the range of 10.75% and 11.5% but our sources confirmed that the deal actually priced at 10.35%. The fact the deal priced lower than guidance suggests that demand was high for this transaction and investors were willing to take a lower coupon to access the notes.

Standard & Poor’s gave the $100m of notes a ‘B’ rating. The notes issued by Queen Street VI Re Ltd. have been approved for listing on the Bermuda Stock Exchange. Prime Management Limited acted as listing sponsor.

You can read more about Queen Street VI Re Ltd. in our Deal Directory.

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