€150m Euros II placing is double plan, covering windstorms
Hannover Re has renewed its Eurus catastrophe bond issued in July 2006, placing €150m was placed with institutional investors in Europe and North America.
Chief executive Ulrich Wallin said: "We are pleased that we succeeded in structuring an attractive transaction that met with keen interest among investors. We were able to place twice the originally planned amount of €75m at our preferred conditions.”
Eurus II provides cover from 30 July 2009 to 31 March 2012 against severe windstorm events in seven European countries (Belgium, Denmark, Germany, France, United Kingdom, Ireland, Netherlands). The performance of the bonds is linked to a wind speed index.
50 to 80 years
"This transaction strengthens our risk management and protects our capital against events with a return probability of between 50 and 80 years. We thus continue to be able to provide windstorm protection for our European clients", Mr. Wallin said.
Eurus II got a preliminary rating of "BB" from Standard & Poor's. AIR Worldwide Corporation handled the modelling of the underlying risks.
It was arranged by BNP Paribas and Aon Benfield Securities.
BNP Paribas guarantee
Hannover Re said: “Eurus II also benefits from an innovative repurchase agreement, under which BNP Paribas guarantees the minimum return on the portfolio and offsets any fluctuations in value on a daily basis. The investors' paid-in capital is put into corporate and government bonds.”
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