Twelve Capital issues $25m private cat bond
Swiss insurance investment manager Twelve Capital has issued its second private cat bond.
Dodeka II is a $25 million zero-coupon bond that expires on December 15, 2014. It covers the risk of natural catastrophes in the US and can be triggered if certain insured industry loss levels associated with either one of the following two scenarios are reached.
Scenario 1 is an earthquake occurring during the first three months and at least one windstorm over the remaining 6.5 months of the life of the bond.
Scenario 2 covers at least two windstorms occurring during a period of 6.5 months before the bond’s maturity date.
This structure is unique in that it combines two different types of events corresponding to two specific time segments. “It enriches the liquid cat bond space by adding alternative to the limited second event cat bond capacity,” the company said.
Structuring private cat bonds has become an increasingly important focus of Twelve Capital’s work. These innovative instruments are extending the range of insurance investment opportunities that Twelve Capital already offers.
“We have a great network in the re/insurance sector, and we have the in-house expertise to transfer insurance risk into liquid niche transactions of a manageable size,” said Roman Muraviev, director at Twelve Capital.
