Newton Re Bondholders Settle Lehman Swap Claim

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.

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