GC Securities* Completes First Ever Indemnity Triggered Multi-Europe Peril Only 144A Catastrophe Bond for Assicurazioni Generali S.p.A.

11-Jul-2017 7:31 AM


 

NEW YORK--()--GC Securities, a division of MMC Securities LLC, a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of Principal At-Risk Variable Rate Notes, with notional principal at €200,000,000, through a newly formed special purpose vehicle domiciled in Ireland, Lion II Re DAC, to benefit Assicurazioni Generali S.p.A., an Italian insurance company and the parent company of the Generali Group. This is the third time that Assicurazioni Generali S.p.A. has utilized the insurance-linked securities market and is the first ever 144A cat bond to provide indemnity protection against multiple Europe perils.

The bond provides four years of per occurrence indemnity protection for Europe windstorms and Europe flood affecting selected European countries and earthquakes affecting Italy. It is also the first time that Europe flood has been covered in a 144A cat bond.

GC Securities served as lead structurer and sole bookrunner.

PRINCIPAL AT-RISK VARIABLE RATE NOTES – PROFILE

Size Covered Perils

Scheduled

Maturity

Initial Annua

l Modeled
Expected Loss

Coupon
€200,000,000

Europe

windstorm, Italy

earthquake and

Europe flood

July 15, 2021 2.24%

Permitted

Investments Yield +

3.00%

QUOTES

James Nash, CEO of Guy Carpenter International

“We are delighted to have successfully applied our capital agnostic approach within the European region as well as completed the first ever 144A cat bond exposed to Europe flood. This transaction was optimized to match Generali's specific needs to the current appetite of capital markets investors while also matching the rest of the risk transfer program with the strengths of the traditional reinsurance market.”

Cory Anger, Global Head of ILS Structuring, GC Securities

“Generali’s balanced structuring decisions when renewing their prior Lion I coverage through the Lion II cat bond led to an expansion of the covered perils (including into non-modelable territories) and also achieving the first euro-denominated cat bond since 2015 despite negative interest rates in the euro-zone. All of this was achieved at the lowest ever differential between the Risk Interest Spread relative to the insurance risk (annual expected loss) in the history of the 144A cat bond market. We are honored to have been selected to lead the structuring of, and sole distribution of, the Lion II bonds to facilitate Generali’s continued centralization and capital optimization objectives to achieve best terms and conditions.”

Chi Hum, Global Head of ILS Distribution, GC Securities

“Generali’s decision to sponsor Lion II Re away from the typical late Q3 and/or Q4 timeframe for Europe perils was rewarded with the broad-based and robust support of more than 20 investors that allowed the deal to be priced almost 15% lower than lowest end of initial guidance. The great execution of the Lion I and Lion II bonds is evidence that the investor community recognizes Generali’s reputation as a premier global insurance company seeking to diversify its reinsurance capacity program to include capital markets and we anticipate robust investor support for future Generali issuances.”

TAGS/KEYWORDS

Guy Carpenter, GC Securities, catastrophe bond, cat bond, James Nash, Generali, Cory Anger, Chi Hum

About Guy Carpenter

Guy Carpenter & Company, LLC is a leading global risk and reinsurance specialist. Since 1922, the company has delivered integrated reinsurance and capital market solutions to clients across the globe. As a most trusted and valuable reinsurance broker and strategic advisor, Guy Carpenter leverages its intellectual capital to anticipate and solve for a range of business challenges and opportunities on behalf of its clients. With over 2,300 professionals in more than 60 offices around the world, Guy Carpenter delivers a powerful combination of broking expertise, strategic advisory services and industry-leading analytics to help clients achieve profitable growth. For more information on Guy Carpenter’s complete line-of-business expertise and range of business units, including GC Specialties, GC Analytics®, GC Fac®, Global Strategic Advisory, GC Securities*, Client Services and GC Micro Risk Solutions®, please visit www.guycarp.com and follow Guy Carpenter on LinkedIn and Twitter @GuyCarpenter.

Guy Carpenter is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With annual revenue of more than $13 billion and approximately 60,000 colleagues worldwide, Marsh & McLennan Companies provides analysis, advice, and transactional capabilities to clients in more than 130 countries through: Marsh, a leader in insurance broking and risk management; Mercer, a leader in health, wealth and career consulting; and Oliver Wyman, a leader in management consulting. Marsh & McLennan is committed to being a responsible corporate citizen and making a positive impact in the communities in which it operates. Visit www.mmc.com for more information and follow us on LinkedIn and Twitter @MMC_Global.

* Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

Contacts

Guy Carpenter
Ed Dixon, 1-917-937-3118
edward.dixon@guycarp.com
or
Guy Carpenter
Jennifer Ainslie, 44.207.357.2058
jennifer.ainslie@guycarp.com

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