Swiss Re Insurance-Linked Fund Management

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Nelson Re catastrophe bond extended again


The confusion around whether the Nelson Re catastrophe bond from Glacier Re is going to make a payout to investors continues after the deal was extended again a couple of days ago. This document from the Cayman Islands Stock Exchange shows that an extension notice was submitted on the 28th November, extending the deal until 6th March 2012.

It was originally thought that Nelson Re’s $67.5m Series 2008-1 Class G notes were facing at least a 60% loss of principal from losses caused by hurricane Ike. Sponsor Glacier Re reported a proof of loss after the event, however the administrator for the deal could not resolve issues between Glacier Re and Nelson Re about whether certain policies were covered under the terms of the cat bond contract.

This further extension suggests that this issue has yet to be resolved. The extension notice states that the reinsurance agreement and the Class G notes are extended pursuant to an Extension Event 1 and extended termination date will be 6th March.

We’ll update you if we hear anything further.

You can read all our coverage of the Nelson Re cat bond deal here. Details of the transaction can be found in our Deal Directory.

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