Swiss Re today announced the successful transfer of USD 275 million of extreme mortality risk to the capital markets through its VITA securitization programme.
Swiss Re entered into a transaction with VITA Capital V Ltd. (“Vita V”), under which it could receive up to USD 275 million, in the event of excess mortality in any part of a pre-defined coverage area. Vita V, in turn, has issued Series 2012-I Class D-1 and Class E-1 notes to the capital markets, each of which is linked to extreme mortality risk in the respective covered areas.
The arrangement covers a five-year risk period starting in the issuance year and ending in 2017. This latest Vita issuance extends the geographic coverage by including Australia for the first time, reflecting Swiss Re’s global mortality business.
|
Series 2012-I |
Area covered |
Notional amount |
Maturity |
Rating |
|
Class D-1 |
Canada and Australia |
USD 125 m |
Jan 2017 |
BBB- (sf) |
|
Class E-1 |
US, Canada and Australia |
USD 150 m |
Jan 2017 |
BB+ (sf) |
“The continuing success of each Vita placement demonstrates its effectiveness in managing Swiss Re’s capital and peak risk exposure, which further increases our ability to meet client needs,” commented Swiss Re’s Chief Underwriting Officer, Matthias Weber.
This is the fifth Vita securitization over the past three years, which brings the amount of extreme mortality risk protection raised by the programme to over USD 2.25 billion. The issuance size underscores the strength of the Vita franchise.
“Starting from the earliest stages of the life ILS market, the Vita programme has served as an anchor for market participants, helping to spur development in other innovative life structures and its consequent investor growth,” stated Swiss Re’s Global Head Life and Health Risk Transformation, Nardeep Sangha.
Swiss Re Capital Markets was the sole manager and bookrunner on the notes issuance. Collateral for the initial Series of Vita V notes consists of [“AAA”]-rated securities issued by the International Bank for Reconstruction and Development (“IBRD”)
The Vita V notes were sold in a private placement pursuant to Rule 144A of the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
