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$200 million catastrophe bond covers California workers comp exposures


SAN FRANCISCO—Standard & Poor's Corp. says a catastrophe bond offered by the California State Compensation Insurance Fund for earthquake-related workers compensation losses is valued at $200 million.

The cat bond will cover California workers comp claims caused by earthquakes through December 2014 for San Francisco-based SCIF, California's largest workers comp insurer.

In a presale report last month, the rating agency said three-year, Class A senior notes would be issued on behalf of SCIF by Golden State Re Ltd., a newly incorporated special-purpose insurer based in Bermuda.

Willis Capital Markets & Advisory brokered the deal, which closed Thursday, according to S&P.

S&P said the cat bond—believed to be the first for workers comp—has an annual attachment probability of about 0.55%. It also noted that only three earthquakes in history could have generated losses that exceeded the bond's attachment point, according to analysis by Newark, Calif.-based catastrophe modeler Risk Management Solutions Inc.