9 April 2013ILS

Citizens closes $250 million cat bond deal at reduced rate

Citizens has used its Bermuda-based SPI to close a new $250 million, three-year capital market risk transfer programme. The deal follows in the footsteps of its record-breaking Everglades Re issuance of last year.  

The second round of bonds were sold at a 40 percent reduction from the rate offered last year. A total of 32 investors took part in the 2013 offering, which was nearly two times oversubscribed. Citizens is expected to complete its traditional reinsurance buy within the next ten days, part of an estimated $1.75 billion in risk transfer for the hurricane season.

Citizens chairman, Carlos Lacasa commented: “this action continues Citizens’ goal of transferring risk to the private sector by working closely with non-traditional capital markets, and further protecting our policyholders and all taxpayers in Florida. Citizens has emerged as an international leader in risk transference and our achievements are being recognized by financial markets around the world.”