Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Muteki Ltd. cat bond could have been triggered by Japan quake


We’ve received a number of reports over night from sources suggesting that the $300m Muteki Ltd. catastrophe bond, issued by Munich Re on behalf of Japanese cooperative Zenkyoren, has been triggered by the 11th March earthquake in Japan. The transaction is measured against the K-Net data, which we understood was still not complete, but sources insist that enough data exists to safely say this cat bond will default and investors will suffer a loss.

We’re hoping that official information (such as rating agency reactions or a comment from Munich Re) regarding Muteki will emerge over the next few days so we can confirm this and also let you know the actual loss to investors.

Trading Risk are reporting the same, and say that the index value based on the K-Net earthquake data has reached 1600 (above the 1400 required to trigger this deal).

As soon as we have any information confirming the fate of Muteki Ltd. we will update you.

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