Allianz Global Corporate & Specialty has successfully closed an innovative catastrophe bond ("cat bond") to transfer the risk of severe river floods in Great Britain and earthquakes in Canada and the US excluding California in an amount of 150 million US dollars. Part of a one billion dollar program, this is the first note issued by Blue Wings Ltd., a special purpose vehicle launched for the benefit of Allianz Global Corporate & Specialty.
The securities are issued by Blue Wings Ltd., a Cayman Island-based company, for the benefit of Allianz Group through its corporate insurance arm, Allianz Global Corporate & Specialty. The transaction is fronted by Swiss Re, which also acted as arranger and lead manager.
The securities offer bondholders a return of 3.15 percent over LIBOR, have a Standard & Poor’s rating of BB+, and the insurance risk, modeled by Risk Management Solutions (RMS), is 0.54 percent per annum. The cover is fully collateralized with minimal credit exposure.