GC Securities has facilitated the placement of Series 2014-1 Notes, with notional principal at $400 million, through a newly formed catastrophe (cat) bond shelf programme, Alamo Re.
The bonds have been placed to benefit the Texas Windstorm Insurance Association (TWIA), marking the first time that it has used the cat bond market to manage its tropical cyclone risks.
The Series 2014-1 bonds are positioned alongside the TWIA’s traditional reinsurance programme to provide annual aggregate protection from tropical storms causing at least $50 million of loss to the TWIA.
GC Securities served as sole structurer and sole bookrunner. Hannover Rück SE serves as the transformer reinsurer facilitating TWIA’s access to catastrophe bond-based risk transfer capacity.
General manager of the TWIA, John Polak, commented: “TWIA appreciates the assistance of GC Securities and Hannover Re in successfully placing our first catastrophe bond.”
“This transaction is another step forward towards our overall funding goals and demonstrates our ongoing commitment to provide financial security to our Texas policyholders.”
Chi Hum, global head of Insurance Linked Securities distribution for GC Securities, said: “The capital market investors have shown again that they will provide broad based support for Alamo Re, a well thought out approach by TWIA to develop a diversified reinsurance programme.”
“This approach combines competitive pricing across markets and innovative features that target the strengths of each capacity source. The breadth of investors providing multiyear collateralised capacity is a valuable complement to the rated markets capacity from the reinsurers.”
“The strong execution on the placement of these notes signals to TWIA that investors are ready, willing and able to support continued issuance from this programme.”
