SCOR launches Atlas IX cat bond
French reinsurer SCOR has launched a $150 million catastrophe bond in a bid to diversify its capital protection tools.
Atlas IX Series 2015-1, will provide the Group with multi-year risk transfer capacity for US Named Storm and US and Canada Earthquake events.
This transaction, issued by Atlas IX Capital – an Irish private limited company – replaces the US tranches of Atlas VI Series 2011-1, which matured on January 8, 2015.
In connection with the placement of the cat bond, SCOR Global P&C will enter into a risk transfer contract with the issuer. SCOR's risk transfer protection from Atlas IX will be fully collateralised with securities issued by the European Bank for Reconstruction and Development.
Victor Peignet, CEO of SCOR Global P&C, said: "The successful placement of this new cat bond, building upon a series of capital market transactions, is fully in line with SCOR's strategic initiative to optimise its retrocession structure to accompany the Group's cat capacity growth. With a protection for US named storm and US and Canada earthquake events on an aggregate basis, this transaction enables SCOR to complement its retrocession programme, minimising counterparty credit exposure and diversifying counterparty risk."
Priced on February 5, the catastrophe bond is expected to close on February 10, 2015.
Aon Benfield Securities acted as the sole structuring agent and sole bookrunner for the deal. The first issuance from the Atlas IX vehicle, Series 2013-1, protects SCOR's extreme mortality exposures in the US.
The protection of its capital constitutes a strategic axis for SCOR and capital market solutions have been regularly used for it, with fifteen transactions completed to date including catastrophe bonds, mortality bonds and contingent capital.