Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Successor X 2011-3 catastrophe bond closes successfully for Swiss Re


Swiss Re’s latest catastrophe bond transaction under their Successor X Ltd. Cayman Islands special purpose vehicle has closed successfully at an upsized $130m. The Series 2011-3 Successor X deal began marketing a few weeks ago, with two tranches of notes, only one of which was being rated. This is the fifth time Swiss Re has used their Successor X Ltd. vehicle to issue cat bonds.

Successor X 2011-3 consists of a $50m of Class V-X4 notes which are exposed to U.S. hurricanes in selected states, Puerto Rico hurricanes and European windstorms. This tranche didn’t upsize and provides Swiss Re with cover on a per-occurrence basis for four years until November 2015.

The other class of notes issued by Successor X are Class V-F4 which are believed to just be exposed to U.S. hurricane risks. This tranche closed at $80m but began marketing as a $50m issuance. Again, this tranche provides Swiss Re with cover until November 2015.

Standard & Poor’s confirmed the rating on the $50m VX-4 notes at ‘B-‘. The $80m V-F4 notes were not rated. Both classes of notes have been admitted to the Cayman Islands Stock Exchange.

This transaction brings the amount of protection Swiss Re has secured through their various Successor issued natural catastrophe bonds to $2.39 billion. Under the Successor X vehicle, the previous take-downs were for $150m in December 2009, $120m in May 2010, $170m in December 2010 and $305m in February 2011.

Martin Bisping, Swiss Re’s Head of Non-Life Risk Transformation, said; “After a brief dip in returns in the wake of the Japan earthquake, the ILS marketplace has rebounded, demonstrating the commitment that investors have to catastrophe bonds. Successor X allows us to seize opportunities to transfer risk at favourable terms and to support growing demand for natural catastrophe capacity from our clients.”

“Insurance-linked securities remain a cornerstone of our hedging strategy, giving us a competitive advantage by allowing us to manage peak catastrophe risk more effectively,” said Matthias Weber, Swiss Re’s Head of the Property and Specialty Division.

Full details on Successor X 2011-3 can be found in our catastrophe bond Deal Directory.

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