Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Zurich’s Lakeside Re III catastrophe bond upsizes to $270m and completes


Another catastrophe bond has completed in 2012 and once again it has upsized before the deal closed. Insurance group Zurich’s latest cat bond transaction Lakeside Re III Ltd., the third in the Lakeside series of deals, completed in the last week and upsized by $45m, from the $225m it was initially marketed at, to close at $270m. This takes 2012 cat bond and ILS issuance to just shy of $6 billion, with $5.939 billion of issuance currently listed in our Deal Directory.

Lakeside Re III provides Zurich American Insurance & Zurich Insurance Co. Ltd. and certain pool companies with a three-year source of fully-collateralized earthquake  cover in the U.S. and Canada. The deal is geographically structured to cover Californian, Pacific Northwest and New Madrid fault earthquake risks.

The Lakeside Re III cat bond provides annual aggregate cover on an indemnity (ultimate net loss) trigger basis over the three-year risk period to 8th January 2016. Zurich maintains a retained share of at least 10% of the aggregated ultimate net losses for each annual risk period under the terms of the underlying reinsurance contract.

Standard & Poor’s assigned a ‘B+’ rating to the single tranche of $270m Lakeside Re III notes. The notes were admitted for listing on the Bermuda Stock Exchange on the 28th December, with Prime Management sponsoring the listing.

You can read full details of the Lakeside Re III Ltd. transaction in our catastrophe bond Deal Directory. You can also read about Zurich’s two previous Lakeside cat bonds, Lakeside Re II Ltd. and Lakeside Re Ltd.

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