Swiss Re complete $175m Series III & IV Vita Capital IV transaction


Swiss Re have announced completion of their latest issuance under the Vita Capital mortality catastrophe bond scheme. The latest two series of notes have been issued under Vita Capital IV Ltd. and enables Swiss Re to transfer $175m of extreme mortality risk to the capital markets.

It’s the third time in the last year that Swiss Re have utilised their Vita programme to transfer mortality risks. $125m of notes were issued in November 2009 and May 2010 as Series I & II of Vita Capital IV Ltd.

The transaction provides Swiss Re with protection of up to $100m in the event of extreme population mortality in the U.S. or Japan through the $100m Series III Class E notes and up to $75m in the event of extreme mortality in Canada or Germany through the $75m Series IV Class E notes. These two new series of Vita notes mature in 2015.

The deal was well received by investors (as all the Vita transactions have been) as they took advantage of an opportunity to diversify their investment portfolios outside of the peak wind risks that have made up the bulk of cat bond investment opportunities this year.

Swiss Re Capital Markets acted as sole manager and bookrunner for this transaction. Collateral for both series was invested in securities issued by the International Bank for Reconstruction and Development. Standard & Poor’s rated both tranches of notes ‘BB+’.

Swiss Re’s Head of Global Life & Health Risk Transformation, Alison Mckie, commented: “The Vita programme provides very efficient risk protection and capital relief, enabling us to provide more client solutions.”

“While Series I and II provided coverage in the UK and U.S., the latest issuance of Vita IV notes broadens the coverage by including additional countries, reflecting Swiss Re’s global mortality business,” added Mckie.

You can read more about this new Vita Capital issuance in our Deal Directory.

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