US hurricanes covered by Blue Fin catastrophe bond
Allianz’s Blue Fin has sold a larger than expected $180m catastrophe bond, the fourth such deal this year, Reuters has reported.
Goldman Sachs and Aon Benfield Securities arranged the privately placed transaction, which was increased from a planned $150m in response to demand. The bond pays a coupon of 13.5% over Libor.
The bond is the second to be launched from Allianz's €1bn Cayman Islands-based Blue Fin shelf programme and will cover its Allianz Argos 14 unit against US hurricane and earthquake losses until April 2012.
Credit rating agency Standard & Poor's assigned a preliminary BB- rating to the deal last month.
Reuters said: “Unlike most catastrophe bonds the transaction is not based around a total return swap, under which a counterparty is contracted to ensure collateral backing the bonds is sufficient to cover interest and principal repayments.
“Instead the collateral will be invested in puttable floating-rate notes issued by triple-A rated German development bank Kreditanstalt fuer Wiederaufbau, which is guaranteed by the Federal Republic of Germany.”
