Aurigen completes second embedded value securitisation
Insurance holding company Aurigen Capital has completed its second embedded value securitisation. It has issued C$210 million ($175 million) of embedded value notes through its subsidiary Valins I.
The transaction, which is sponsored by Aurigen Reinsurance (AR), covers a closed block of Canadian life insurance policies reinsured by ARL between 2008 and 2013.
Principal repayment on the notes is linked to the emergence of future profits on the subject business consisting of 26 life reinsurance treaties written by Aurigen Reinsurance Company, an affiliate of AR, from 12 life insurance companies.
The notes have a six year term with and a floating rate coupon rate of three month CDOR plus 3.65 percent.
A key feature of the offering structure is that it allows for the increase and extension of the notes. Aurigen said that this provides it with the flexibility to add future new business and continuous access to capital funding to support its growth.
A portion of the proceeds from the issue have been used to repay the notes related to the Vecta I embedded value securitisation which was completed in December 2011. The remainder of the proceeds will be used for general corporate purposes.
"This transaction further extends and diversifies Aurigen's capital structure," said Alan Ryder, president and chief executive officer of Aurigen Capital. "The transaction demonstrates Aurigen's leadership, innovation and access to the capital markets. Its creative structure enables ongoing access to capital funding to continue the development of our business."
