The decision by Munich Re to pull the plug on its recent catastrophe bond Queen Street X Re is not indicative of any wider uncertainty in the insurance-linked securities (ILS) markets with investor demand still robust at the right price.
That is the consensus among market practitioners commenting on the recent decision by the world’s largest reinsurer to scrap its latest catastrophe bond issuance.
Munich Re was trying to sell a bond reportedly worth around $100 million seeking retrocessional protection from US hurricanes and Australian cyclones.
It was apparently disappointed by investor interest in the deal at the pricing it was seeking. An announcement from the bookrunners said that the notes would no longer be offered due to current market conditions as the pricing and capacity targets for the cat bond could not be met.
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Munich Re, Queen Street X Re, Fermat Capital, Goldman Sachs, North America, Asia-Pacific, Europe