Willis Capital Markets Acts as Co-Lead Manager in Innovative $150 Million Aggregate Indemnity Catastrophe Bond
New York, February 22, 2008 - Willis Capital Markets, a business division of Willis Group Holdings Limited (NYSE: WSH), the global insurance broker, has acted as Co-Lead Manager of an offering of $150 million of notes by Newton Re Limited. The notes, which have been issued by Newton Re Limited off its existing unlimited shelf program, collateralize a reinsurance agreement with Catlin Insurance Company Limited, Bermuda and the Catlin Syndicate at Lloyd’s (Syndicate 2003) (together, “Catlin”).
The transaction provides Catlin with indemnity based reinsurance protection in respect of losses arising on its property treaty catastrophe excess of loss account, property risk excess of loss account and proportional reinsurance account. Covered perils are windstorms and earthquakes in the USA, windstorms in Europe and typhoons and earthquakes in Japan. Cover is provided on an annual aggregate basis over a three year period.
The notes, which were rated BB by Standard & Poor's and bb by AM Best, have a coupon of Libor +750 basis points. The notes mature on January 7, 2011. Lehman Brothers acted as sole initial purchaser and Bookrunner for the notes.
Mark Hvidsten, CEO, Willis Capital Markets, said, "We are delighted to have worked with Catlin to develop a highly innovative transaction providing multi-year aggregate excess of loss protection of a reinsurance account. This is a complex risk that can be more efficiently absorbed in the catastrophe bond market than by traditional reinsurance capital. Careful and sophisticated structuring has resulted in a transaction that enables investors to support the deal, while providing Catlin with economic and rating agency capital efficiencies. The cover is perhaps the broadest protection of a reinsurance account yet seen in the catastrophe bond market.”
Joe Plumeri, Chairman and CEO, Willis Group commented. “Willis is excited to have been instrumental in executing this ground-breaking deal. Our business is about helping our clients optimize their capital efficiency. This transaction demonstrates our ability to deliver innovative capital markets based solutions that achieve these objectives.”
Willis Capital Markets, the trading name of a business unit within Willis Group Holdings Limited, specializes in the structuring and placement of financial instruments that access risk capital from outside the traditional insurance and reinsurance markets.
This capability enhances Willis’ offering to its clients by enabling it to access and place risk with all sources of risk-bearing capacity. Willis Capital Markets operates in a global capacity and trades in the United States through Willis Securities Inc (a licensed broker dealer authorized and regulated by FINRA and member of SIPC) and in the United Kingdom and European Union countries through Willis Structured Financial Solutions Ltd (authorized by the UK Financial Services Authority).
Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 300 offices in some 100 countries, with a global team of approximately 16,000 Associates serving clients in some 190 countries. Additional information on Willis may be found at www.willis.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements thereunder.