|
Michael Millette |
The asset-backed securities sector is starting to see the uptick many said to expect post-ASF2012, with some market players turning their attention to catastrophe bonds (aka event- or insurance-linked securities). Swiss Reinsurance Company is hitting the market with a $40 million offering on insurance coverage against hurricane losses in the U.S. and Puerto Rico, and Embarcadero Reinsurance is issuing a $150 million transaction covering earthquake insurance losses in California.
Class V-D3 notes on reinsurance provider Swiss Re’s Successor X Series 2012-1 program are expected to achieve a B2 rating from Moody’s Investors Service, according to a presale report. The covered risk period runs from Jan. 27, 2012 through Jan. 20, 2015. Proceeds from the notes will be invested in U.S. Treasury money market funds.
Deutsche Bank is the sole structure and bookrunner on Embarcadero Re’s variable-rate notes, which are expected to garner a BB rating from Standard & Poor’s, and price over the Treasury Money Market rate. The private, 144a deal’s collateral comes from ceding reinsurer California Earthquake Authority.
Also in the cat bond space, health insurance company Aetna has sponsored an issuance from its Vitality Re III vehicle, pricing a $150 million transaction last week. The $105 million, BBB-rated A class priced at 420 bps over TMM, and the $45 million BB-rated B class priced at TMM plus 620 bps. Standard & Poor’s rated the transaction and Goldman Sachs is running the books.
Elsewhere in the market, Sallie Mae is premarketing a securitization of private credit student loans, which is expected to price later this week. The student loan originator traded its most recent securitization of $765 million in Federal Family Education Loan Program notes Jan. 11, with pricing on the one-year AAAs hitting at 25 bps over LIBOR, and on the three-year AAAs in the 45-110 bps over LIBOR range. Credit Suisse, Barclays Capital and Goldman....