HARTFORD, Conn.—Travelers Indemnity Co. plans to issue a $250 million catastrophe bond to transfer a portion of its U.S. hurricane risks to the capital markets, Standard & Poor’s Corp. said.

The bond, Longpoint Re II Ltd., provides the Hartford Conn.-based insurer with multiyear reinsurance protection against hurricane losses in the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.

The transaction is structured in two tranches: The $100 million Class A notes provide three years of protection on a per-occurrence basis against certain U.S. hurricanes, and the $150 million Class B notes provide similar protection over a four-year period.

New York-based on Friday S&P rated both notes BB+.

The deal is expected to close by year-end S&P said.

Risk modeling will be provided by Newark, Calif.-based Risk Management Solutions Inc. using its RiskLink Version 9.0 model.

Separately, Swiss Reinsurance Co. is preparing to issue a $150 million catastrophe bond to cover its California earthquake exposures for a one-year period, market sources confirmed Monday.

The bond, Redwood Capital XI Ltd., is being marketed to investors and is expected to close on Dec. 31, sources said.

The transactions are expected bring the insurance-linked securities market closer to the $3 billion to $4 billion that experts anticipated for 2009. Issuance volume stands at roughly $2.4 billion so far this year.

Experts say cat bond sponsors, who have benefited from a drop in pricing in the fourth quarter, will continue to see favorable conditions because of the mild 2009 U.S. hurricane season, which drew to a close last week.