The Atlas VI Capital Ltd. Series 2011 catastrophe bond transaction which we covered the basic details of in an article last week has now received its preliminary rating from Standard & Poor’s. As a result we have more details on the transaction to bring to you here and have also updated our Deal Directory accordingly.
The (just over) three year $200m cat bond deal from SCOR will provide them with protection against a number of risks and is structured in three classes of notes within two series.
The deal comprises $50m Atlas VI Capital Ltd. Series 2011-1 Class A notes and $50m Class B notes which are exposed to U.S. hurricanes and earthquakes, and €75m Atlas VI Capital Ltd. Series 2011-2 Class A notes which are exposed to European windstorm. The U.S. hurricane and earthquake exposure cover will run from January 2012 until the end of December 2014 while the European windstorm cover will run from December 2011 until the end of March 2015, securing an extra full Euro windstorm season of protection. The cover afforded is fully collateralized, multi-year and measured on an annual aggregate basis over the risk periods.
This deal will provide SCOR with partial replacement cover for the U.S. hurricane and earthquake cover from their soon to mature Atlas V cat bond transaction. That deal afforded them $200m of cover for those risks so we could see the 2011-1 notes grow before close if SCOR seek to fully replace that cat bond through this deal.
Standard & Poor’s have given the Series 2011-1 Class A and B notes preliminary ratings of ‘B’ and ‘B+’ respectively. The Series 2011-2 Class A notes have been given a preliminary rating of ‘B’.
We’ll update you when this deal comes to market. It will be interesting to see if any of the classes of notes upsizes. The way this deal is structured into multiple series of notes as well as classes should give investors a good opportunity to acquire some diversification for their portfolios so this cat bond could prove popular.
Or Deal Directory contains more detail on this Atlas VI Capital 2011 cat bond.