Investors compete for Munich Re cat bond
Munich Re has completed a $100 million cat bond that will provide it with coverage for three seasons of per occurrence protection for named storms affecting the US and for cyclones affecting Australia.
GC Securities, the sole bookrunner on the deal, praised the strong support provided by investors keen to participate in the bond. This was the sixth Queen Street cat bond GC Securities had worked on.
Queen Street Re IX is the ninth cat bond to benefit Munich Re, the eighth overall cat bond issuance benefitting Munich Re since 2011 and the first cat bond issuance benefitting Munich Re provided via an Irish special purpose reinsurance vehicle.
“Munich Re’s ability to offer a cat bond with a favorable peril mix of Australia cyclone paired with US hurricane in a transparent non-indemnity format at a risk layer that offers higher spread was the catalyst to the tremendous support that the capital markets provided, “ said Cory Anger, global head of ILS Structuring, GC Securities.
“Queen Street IX was one of the broadest cat bond placements with respect to investor interest and the final number of participating investors thereby allowing Munich Re to receive best execution to support application of cat bond protection to a multi-peril transaction that includes a non-peak peril.”
Chi Hum, global head of ILS Distribution, GC Securities, added: “The capital markets capacity continues to grow and combined with a strong interest in diversifying cat risks has presented a market opportunity for catastrophe bond issuers that was very much a benefit to Munich Re’s Queen Street Re IX deal.
“A higher risk return profile relative to other market offerings also facilitated good execution at an attractive price for this capacity. The market recognizes and continues to support the Queen Street series of catastrophe bonds from this sophisticated capital markets issuer and we at GC Securities are pleased to have brought this to market on behalf of Munich Re.”