Posted on 28 Dec 2010
Luxembourg-based company Flagstone Reinsurance Holdings SA, in response to the 2005 hurricane season, added to its protection from natural disasters by issuing $210 million of catastrophe bonds.
One portion provides $70 million of coverage and pays 11.9 percentage points more than the three-month London interbank offered rate, Brenton Slade, a spokesman for company, said today in an interview. Another, at $80 million, yields 16.4 percentage points above the benchmark. A third, $60 million slice pays 9.5 percentage points above Libor.
All three mature in 2014 and cover losses from U.S. hurricanes and earthquakes, according to Slade. The $80 million piece also protects against Cayman Islands hurricanes.
“These transactions continue to reinforce our capital strength,” Flagstone Chief Executive Officer David Brown said in a statement announcing the issue.
Flagstone was formed after reinsurance losses from hurricanes Katrina, Rita and Wilma, according to its website. The company previously issued $175 million in catastrophe bonds through a special purpose reinsurer called Montana Re, according to data compiled by Bloomberg.