Munich Re provides capital-markets solution for North Carolina Underwriting Associations – US$305m Hurricane catastrophe bonds issued

General Press Releases Wednesday May 12, 2010 15:09
Munich Re has provided for the North Carolina Joint Underwriting
Association and North Carolina Insurance Underwriting Association a
US$305m catastrophe bond transaction that transfers hurricane risk in
North Carolina to the capital markets. Munich Re acted as joint lead
manager in the transaction, reinsured the risk via its US operation and
placed the bond with institutional investors in the EU and Switzerland
via its placement entity.
Munich Reinsurance America has reinsured a portion of two catastrophe
hurricane risk layers of the North Carolina Joint Underwriting
Association and North Carolina Insurance Underwriting Associationwhich
have been fully retroceded to Cayman Islands-registered Johnston Re
Ltd., providing coverage up to a maximum of US$305m. Johnston Re Ltd.
has issued two tranches of a principal at-risk variable rate note
program with a 3-year risk period. The first tranche uses a “drop-down”
feature that will replace the expiring Parkton Re 2009-1 Ltd. bond after
one year. The second tranche will stay for three years at the same level
directly above the first tranche. The issuance was significantly
oversubscribed and due to strong demand upsized from the originally
announced US$200m.
“We are pleased to have again been able to provide our US clients with a
capital markets transaction. Munich Re offers its clients the full
spectrum of risk transfer solutions, and the capital markets constitute
a good complementary risk carrier for specialized peak risks like North
Carolina hurricane. Reinsuring the risk directly in the US means that we
offer full credit for reinsurance benefit for our clients in the US
market,” said Tony Kuczinski, President and CEO of Munich Reinsurance
America, Inc.
In the U.S., Munich Re provides access to a full range of
property-casualty reinsurance and specialty insurance products through
Munich Reinsurance America, Inc., American Modern Insurance Group and
Hartford Steam Boiler Group. Together, we deal with the issues that
affect society and work to devise cutting-edge solutions that render
tomorrow’s world insurable. Munich Reinsurance America, Inc. has been
successfully addressing the key challenges of the future since 1917. Our
clients trust us to develop solutions for the whole spectrum of
reinsurance – from traditional reinsurance agreements to the management
of complex specialty reinsurance risks. Our recipe for success: we
anticipate risks early on and deliver solutions tailored to clients’
needs, creating opportunities to achieve sustained profitable growth.
This press release is prepared for the purpose of public announcement of
the issuance of the bonds referred to herein (the "Bonds") and does not
constitute or form part of any offer or invitation to sell or issue or
any solicitation of any offer to purchase or subscribe for any
securities in any jurisdiction, nor shall it (or any part of it) or the
fact of its distribution form the basis of, or be relied upon in
connection with, or act as any inducement to enter into, any contract or
commitment therefore.
All of the Bonds have been sold and this announcement is a matter of
record only. The Bonds have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act"), or
any state or foreign securities law and the issuer is not and will not
be registered under the U.S. Investment Company Act of 1940, as amended
(the "Investment Company Act").
The Bonds were offered and sold only to investors who are qualified
institutional buyers in accordance with Rule 144A under the Securities
Act and who, in the case of U.S. persons (as the term is defined in
Regulation S under the Securities Act), are also qualified purchasers
for purposes of Section 3(c)(7) of the Investment Company Act and may
not be re-offered or re-sold in the United States except in compliance
with all applicable transfer restrictions. Any purported transfer in
violation of those restrictions will be null and void. In addition, the
Bonds may be held only in certain permitted jurisdictions.
This press release contains forward-looking statements that are based on
current assumptions and forecasts of the management of Munich Re. Known
and unknown risks, uncertainties and other factors could lead to
material differences between the forward-looking statements given here
and the actual development, in particular the results, financial
situation and performance of our Company. The Company assumes no
liability to update these forward-looking statements or to conform them
to future events or developments.
CONTACT: Munich Re
Media Relations USA
Terese Rosenthal, +1-609-243-4339
Media Relations Munich
Michael Able, +49 (89) 3891 2934

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