CHICAGO, Feb. 7, 2018 /PRNewswire/ -- Aon Securities, the
investment banking division of global reinsurance intermediary and
capital advisor Aon Benfield, has
assisted the World Bank in structuring the largest ever catastrophe
bond covering earthquake, providing the organization with
USD1.36 billion of capital markets
protection.
The bond, which mitigates balance sheet risk for the World Bank
in Chile, Colombia, Mexico and Peru by offering protection against earthquake
risk on a parametric basis, is the second largest catastrophe bond
on record, and represents the largest sovereign risk transfer in
the history of the insurance-linked securities sector.
The issuance was made across five tranches of notes – one for
each of Chile, Colombia and Peru, and two for Mexico. Under the issuance, Chile will receive USD500 million, Colombia USD400
million, Mexico
USD260 million and Peru USD200
million in earthquake risk protection.
The bond's parametric trigger is based on U.S. Geological Survey
data. Coverage is provided on a three-year basis for the
Chile, Colombia and Peru notes, and on a two-year basis for the
Mexico notes.
The transaction brings the total amount of risk transfer
facilitated by the World Bank to USD3.6
billion, and is part of the organization's broader work to
support Chile, Colombia, Mexico and Peru – all member countries of the Pacific
Alliance – in managing risk from natural disasters.
Paul Schultz, CEO of Aon
Securities, said: "We are honored to support the Pacific Alliance
members and World Bank in bringing this pioneering transaction to
the market. This record-breaking issuance highlights the strategic
partnership between nations seeking efficient sources of capital to
fund emergency costs and investors seeking to invest in
diversifying risks and support sustainable development initiatives.
We are optimistic that this transaction will pave the way for other
governments to develop more resilient risk management programs for
their uninsured exposures."
Further information
Aon Benfield PR team: Andrew
Wragg (+44 207 522 8183 / 07595 217168) David Bogg, Alexandra
Lewis
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alerts: http://aon.mediaroom.com
About Aon Securities
Aon Securities Inc. and Aon Securities Limited (collectively, "Aon
Securities") provide insurance and reinsurance clients with a full
suite of insurance-linked securities products, including
catastrophe bonds, contingent capital, sidecars, collateralized
reinsurance, industry loss warranties, and derivative products.
As one of the most experienced investment banking firms in this
market, Aon Securities offers expert underwriting and placement of
new debt and equity issues, financial and strategic advisory
services, as well as a leading secondary trading desk. Aon
Securities' integration with Aon
Benfield's reinsurance operation expands its capability to
provide distinctive analytics, modeling, rating agency, and other
consultative services.
Aon Benfield Inc., Aon Securities Inc. and Aon Securities
Limited are all wholly-owned subsidiaries of Aon plc. Securities
advice, products and services described within this report are
offered solely through Aon Securities Inc. and/or Aon Securities
Limited.
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SOURCE Aon plc