Newton Re Bondholders Settle Lehman Swap Claim
Mar/23/2010 09:11 AM Filed in: Catastrophe
Bonds
Both sides settle
on $37 million to terminate the cat bond’s
collateral contract.
Investors
in the
Newton
Re catastrophe
bond have settled with bankrupt Lehman
Brothers over
the swap counterparty agreement that acted as
collateral on the $150 million note.
According to a shareholder notice, both Newton and Lehman agreed to settle the claim for $37.5 million. The settlement will terminate the swap agreement that Lehman and Newton inked in June of 2007.
"The Directors, taking all factors into consideration, deem it prudent and in the best interest of Newton Re, to accept the terms of the Termination Agreement put forward by Lehman as revised," the filing stated.
Newton Re said 77 percent of outstanding shareholders indicated they approved of the settlement.
Lehman's bankruptcy in September 2008 caused the catastrophe bond market to come to a grinding halt because is acted as counterparty within the collateral programs of several issuers.
Cayman-domiciled Newton Re was issued in February of 2008 and is an indemnity triggered structure. It was issued by Catlin Group based in Bermuda.
According to a shareholder notice, both Newton and Lehman agreed to settle the claim for $37.5 million. The settlement will terminate the swap agreement that Lehman and Newton inked in June of 2007.
"The Directors, taking all factors into consideration, deem it prudent and in the best interest of Newton Re, to accept the terms of the Termination Agreement put forward by Lehman as revised," the filing stated.
Newton Re said 77 percent of outstanding shareholders indicated they approved of the settlement.
Lehman's bankruptcy in September 2008 caused the catastrophe bond market to come to a grinding halt because is acted as counterparty within the collateral programs of several issuers.
Cayman-domiciled Newton Re was issued in February of 2008 and is an indemnity triggered structure. It was issued by Catlin Group based in Bermuda.