MUNICH RE MARKETING QUEEN STREET VI

Munich Re has begun marketing its sixth Queen Street cat bond, its second this year, reports Artemis.bm. The deal seeks cover for peak perils in US hurricane and European windstorm – an unusual deal given that the Atlantic hurricane season has already started. The offering will give protection against Atlantic hurricane events between August 1 2012 and March 31 2015 and against European windstorm events from October 2012 to March 31 2015. Queen Street VI follows its predecessor ( IIN 24, February 14 2012) in being Bermuda-domiciled: the three previous issues had been domiciled in Ireland. As is now standard with this kind of issue, PCS will supply the numbers for the Atlantic hurricanes, while PERILS will supply the data for Europe. AIR Worldwide is providing the risk modelling. Most vulnerable areas in the US are protected, as is much of north-western Europe, with industry loss index triggers functioning on a per-occurrence basis. There is an annual reset, plus limitations to the weight applied to single regions. The layer is at a high level. AIR said that there had only been one historic hurricane that would have resulted in a loss of capital (in 1926, when a hurricane hit Florida and Alabama), and that no European windstorm would have triggered such a loss. Rating agency S&P have given the tranche a preliminary rating of 'B. Recent Queen Street Re sizes have started at $75m, with some being upsized after the initial marketing period.