Florida Municipal completes cat bond
The Florida Municipal Insurance Trust (FMIT) has completed a $20 million three year catastrophe bond, called Sunshine Re 2013-1 that covers Florida named windstorms on a per-occurrence basis.
Arranged by Towers Watson Capital Markets (TWCM), the deal had a coupon of 9.25%. It will provide three-year indemnity-based collateralised catastrophe reinsurance coverage.
This deal represents the fourth private placement bond TWCM has placed but this is its first deal beyond a year. The company said that by extending Sunshine Re to three years, FMIT gained additional stability and flexibility in its reinsurance programme, sourced new markets and built relationships with the growing convergence reinsurance markets.
"We continue to see increased support from insurance-linked securities investors for our private placement approach that brings new cedants and diversifying perils to the market," said Michael Popkin, TWCM senior vice president.
Steve Levene, corporate practice leader for insurance brokerage and risk consulting, Towers Watson, added: "The indemnity-based coverage from the collateralized capacity works very well with the rest of the reinsurance placement. FMIT took a lot of comfort in the fact that the cover follows the fortunes of its underlying book of business."
