$200 Million Residential Re Catastrophe Bond Places
USAA has placed its 17th catastrophe bond into the market Thursday with a $200 million, four year deal that continues its Residential Reinsurance Ltd. series.
Standard & Poor’s rated the bond’s $50 million Class 3 notes — which cover U.S. hurricane, earthquake, severe thunderstorm, winter storm and wildfire losses on a per-occurrence basis — a ‘BB-‘.
That tranche will cover 6.25% of ultimate loss between the attachment point of $2 billion and the exhaustion point of $2.8 billion.
The $110 million Class 5 notes cover the same perils, but on an annual aggregate basis and were rated ‘BB’, according to a statement issued Thursday. The Class 5 notes will cover approximately 27.23% of ultimate net loss between the attachment point of $1.571 billion and the exhaustion point of $1.975 billion, S&P said.
A third $40 million Class 7 tranche of the bond was not rated by S&P, but was listed on the Cayman’s Island Stock Exchange.
USAA is the longest running player in the catastrophe bond sector, with the Residential Re series of bonds coming to market in 1997.
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