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Member, Beacon International Group, Ltd.
ZUG, Switzerland--Swiss reinsurer Converium has issued $100 million of floating-rate notes to protect the company against losses from natural catastrophes.
The securitization, placed with private investors, will be triggered by second and subsequent perils from Atlantic hurricanes, U.S. and Japanese earthquakes and European windstorms, Converium said in a statement. Zug, Switzerland-based Converium was formed in 2001 from reinsurance operations spun off by Zurich Financial Services Group.
Coverage from the notes was based on a catastrophe model of Converium's exposures in those areas provided by Boston-based AIR Worldwide Corp., and the note issue was underwritten by Aon Capital Markets, a unit of Chicago-based Aon Corp., Converium said.
The notes, which mature in five years, were priced at the London Interbank Offered Rate plus 540 basis points, Converium said. LIBOR is a commonly used benchmark for pricing catastrophe bonds and other risk securitization instruments.