Queen Street II Capital Ltd.

Two Queen Street catastrophe bond transactions, sponsored by reinsurance firm Munich Re, have been downgraded by S&P over a heightened risk that investors will not receive back 100% of the outstanding principal amount at maturity.

Another of reinsurer Munich Re’s catastrophe bond transactions has been adversely affected by the uncertainty over the U.S. debt ceiling. Queen Street II Capital Ltd. has suffered a loss of principal in the collateral account due to a decline in its per-unit mark-to-market value.

The Bermuda Stock Exchange (BSX) has issued a press release to announce that they have hit a record volume of insurance-linked securities (catastrophe bonds) listed on their exchange. The recent completion of the Munich Re issued Queen Street II Capital Ltd. transaction has taken the amount of cat bonds listed in Bermuda to $1.814 billion.

Munich Re has listed the notes of its recently closed $100m Queen Street II Capital Ltd. U.S. hurricane and European windstorm catastrophe bond on the Bermuda Stock Exchange. This will please Bermuda which is seeking to grow its share of the global catastrophe bond market by offering attractive listing terms to issuers.

In the midst of the uncertainty surrounding the events in Japan, the catastrophe bond market will be encouraged to see the announcement from GC Securities that they have successfully helped Munich Re complete their latest catastrophe bond transaction. GC Securities have been involved in three cat bond transactions during Q1 2011.

One of the interesting features of Munich Re’s Queen Street II Capital Ltd. catastrophe bond transaction is the collateral arrangements. The Queen Street II deal is still marketing at the moment but they have already established a fund to manage the investment collateral that the transaction will utilise.

Munich Re is seeking to issue a new catastrophe bond under an Irish special purpose vehicle, Queen Street II Capital Ltd. This is Munich Re’s second Queen Street cat bond transaction, they issued €170m of catastrophe bonds under Queen Street Ltd. in March 2008. That was a three year deal so it’s expected that this new […]