Deal to protect insurer against US hurricane
US insurance group The Hartford has completed a new $135m issuance from its Foundation Re catastrophe bond programme.
The deal, which marks the fifth issuance from the Foundation Re programme , protects the Hartford Fire Insurance Company against US Hurricane.
The bonds have an expected loss and pay investors a coupon of 5% above the yield of a treasury money market fund.
GC Securities, the capital markets division of reinsurance broker Guy Carpenter, acted as co-structuring agent and co-manager for the offering.
“The execution of Foundation Re 2011-1 within stated guidance and with upsized issuance amount is a testament to the Hartford brand and evidence of the catastrophe bond market’s continued ability to function as a valuable source of risk transfer capacity for cedants,” said Bill Kennedy, CEO of global analytics and advisory at Guy Carpenter, in a statement.
Cory Anger, global head of ILS structuring at GC Securities, added: “Clearly, investors are keen to support a strong sponsor that is committed to accessing the cat bond market with a transparent structure and trigger mechanics.”