GC Securities, a division of MMC Securities Corp., a U.S.
registered broker-dealer and member FINRA/NFA/SIPC, today announced
the placement of the Series 2015-1 Notes, with notional principal
of USD 100,000,000, through the newly formed catastrophe bond shelf
program, Bosphorus Ltd., to benefit the Turkish Catastrophe
Insurance Pool (“TCIP”). The 2015-1 Notes represent the second time
that TCIP has utilized the capital markets to obtain earthquake
protection on a parametric basis. TCIP, managed by Eureko Sigorta
A.Ş., first accessed the cat bond market in 2013 via the issuance
of Bosphorus 1 Re Ltd. and has now sourced USD 500 million in total
of catastrophe bond capacity from capital market investors.
The Series 2015-1 Notes provide three years of per occurrence
protection for earthquakes affecting the Istanbul region and are
triggered based on certain ground motion measurements captured at
certain ground motion seismometers that are part of the Istanbul
Early Warning and Rapid Response System operated by Boğaziçi
University Kandilli Observatory and Earthquake Research Institute
(KOERI) with logistical support from the Istanbul Governorate,
Istanbul Metropolitan Municipality and First Army Headquarters.
GC Securities served as the sole bookrunner on the transaction.
Risk Management Solutions, Inc. served as expertizing modeling firm
and calculation agent.
RISK PROFILE
Series 2015-1Notes
Size Rating
ExpectedMaturity
Coupon Class A Notes
$100,000,000 Unrated July 17, 2018
IBRD Note Interest Rate + 3.25%
QUOTES
Süha Çele, Executive Board Member of Eureko Sigorta
A.Ş.
“We are proud to be the sponsor of Bosphorus Ltd. Our previous
bond, Bosphorus 1 Re, was a real success story as it is the first
cat bond covering Turkish perils. We are pleased to see that the
second bond is also well accepted by the capital markets, which is
showing us also that the bond program of TCIP is now well
established. In view of the constantly growing portfolio of TCIP,
our cooperation with the capital markets will continue in the near
future, which would allow TCIP to diversify its reinsurance buying
and utilize multi-year capacity at a stable price.”
Remzi Duman, Reinsurance Director responsible for reinsurance
affairs of Eureko Sigorta A.Ş.
“The transparent trigger mechanics were understood and accepted
by investors, and strong demand made this a highly successful
transaction. Bosphorus 1 Re was the first deal from an untapped
market, Turkey, and we are happy to sustain our appetite in the ILS
market through Bosphorus Ltd.”
David Priebe, Vice Chairman of Guy Carpenter
“The successful execution of Bosphorus Ltd. on behalf of TCIP
continues to cement GC Securities’ position as the global market
leader for capital markets-based insurance risk transfer solutions
for public, governmental and quasi-governmental entities. Marsh
& McLennan’s continued commitment to bringing alternative
capital solutions for the benefit of our global clients highlights
the breadth of the GC Securities platform and continues to allow
for Guy Carpenter’s global client base to access alternative
capital-based risk transfer solutions.”
Cory Anger, Global Head of ILS Structuring, GC
Securities
“We are delighted that TCIP has elected to utilize catastrophe
bond-based protection for a second time to complement its
traditional reinsurance program and build upon the success of its
initial use of catastrophe bonds. After the successful issuance of
USD 100 million of the Series 2015-1 Notes, TCIP has now
transferred in total USD 500 million of earthquake risk affecting
the Istanbul region to the catastrophe bond market. For the Series
2015-1 Notes, TCIP enhanced the initial parametric trigger
structure by incorporating three new ground motion seismometers
within the parametric index given the continued growth and success
of TCIP. The use of an unsubordinated, unsecured note issued by the
International Bank for Reconstruction and Development as the
collateral solution balances giving investors superior investment
yield and diversifying the type of collateral solution that are
most common in catastrophe bond transactions while maintaining high
investment quality for TCIP. Finally, the use of a derivative
(instead of reinsurance) between Bosphorus Ltd. and TCIP allows for
speedy recoveries by TCIP once the parametric index value is
determined.”
Chi Hum, Global Head of ILS Distribution, GC
Securities
“The capital markets have continued to forge a symbiotic
relationship with TCIP and this has been demonstrated by the
overwhelming investor support given the oversubscription of orders
seen during the bookbuilding process for the Bosphorus Ltd.
transaction and the broad base of investor participation with more
than 20 investors. The investor base was attracted to the
diversifying exposure that the Series 2015-1 Notes provide, in
addition to a formulated and transparent parametric trigger. GC
Securities is honored to have been instrumental in placing the
Series 2015-1 Notes with investors on behalf of TCIP.”
About Guy Carpenter
Guy Carpenter & Company, LLC is a global leader in providing
risk and reinsurance intermediary services. With over 50 offices
worldwide, Guy Carpenter creates and executes reinsurance solutions
and delivers capital market solutions* for clients across the
globe. The firm’s full breadth of services includes
line-of-business expertise in agriculture; aviation; casualty
clash; construction and engineering; cyber solutions; excess and
umbrella; excess and surplus lines; healthcare & life; marine
and energy; mutual insurance companies; political risk and trade
credit; professional liability; property; public sector;
retrocessional reinsurance; surety; terrorism and workers
compensation. GC Fac® is Guy Carpenter’s dedicated global
facultative reinsurance unit that provides placement strategies,
timely market access and centralized management of facultative
reinsurance solutions. In addition, GC Analytics®** utilizes
industry-leading quantitative skills and modelling tools that
optimize the reinsurance decision-making process and help make the
firm’s clients more successful. For more information, visit
www.guycarp.com and follow Guy Carpenter on Twitter
@GuyCarpenter.
Guy Carpenter is a wholly owned subsidiary of Marsh &
McLennan Companies (NYSE:MMC), a global professional services firm
offering clients advice and solutions in the areas of risk,
strategy, and people. With annual revenue of $13 billion, Marsh
& McLennan’s 57,000 colleagues worldwide provide analysis,
advice, and transactional capabilities to clients in more than 130
countries through: Marsh, a leader in insurance broking and risk
management; Mercer, a leader in talent, health, retirement, and
investment consulting; and Oliver Wyman, a leader in management
consulting. Marsh & McLennan is committed to being a
responsible corporate citizen and making a positive impact in the
communities in which it operates. Visit www.mmc.com for more
information.
*Securities or investments, as applicable, are offered in the
United States through GC Securities, a division of MMC Securities
Corp., a US registered broker-dealer and member FINRA/NFA/SIPC.
Main Office: 1166 Avenue of the Americas, New York, NY 10036.
Phone: (212) 345-5000. Securities or investments, as applicable,
are offered in the European Union by GC Securities, a division of
MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and
regulated by the Financial Conduct Authority, main office 25 The
North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products
are placed through qualified affiliates of Guy Carpenter &
Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd.
and Guy Carpenter & Company, LLC are affiliates owned by Marsh
& McLennan Companies. This communication is not intended as an
offer to sell or a solicitation of any offer to buy any security,
financial instrument, reinsurance or insurance product. **GC
Analytics is a registered mark with the U.S. Patent and Trademark
Office.
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version on businesswire.com: http://www.businesswire.com/news/home/20150826005638/en/
Guy CarpenterMissy DeAngelis,
1-917-937-3118missy.deangelis@guycarp.comorJennifer Ainslie,
44-207-357-2058jennifer.ainslie@guycarp.com
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