Allianz has successfully transferred storm and earthquake risks to the capital markets through a catastrophe bond with a volume of USD 175 million and a term of three years. It offers investors an interest spread of 4.25% per annum over the permitted investments yield. The bond protects Allianz against the risk of losses from storm events in the US, Caribbean, and Mexico as well as earthquake events in the US and Canada. The transaction is based on a modified industry loss trigger for the US and Canada, and a modeled loss trigger for the Caribbean and Mexico. The notes with a "BB+ (sf)" rating of Standard & Poor’s were oversubscribed and upsized to USD 175 million from the originally announced volume of USD 150 million.
“Cat bonds represent a key element of our protection landscape.The Blue Danube II Series 2013-1 issuance allows Allianz to lock in a competitive price over a period of three years for protection against natural catastrophes. Thus, we can benefit from the attractive conditions which result from the strong demand for cat bonds in the capital markets,” says Amer Ahmed, CEO of Allianz Re, the reinsurance division of Allianz SE, which is responsible for structuring the transaction for the Allianz Group.
Since 2007, Allianz has returned regularly to the catastrophe bond market underlining its commitment to all markets for natural catastrophe protection.