EVERGLADES RE CLOSES $250M CAT BOND DEAL FOR CITIZENS

Florida-based insurer of last resort Citizens has secured $250m in collateralized reinsurance cover against hurricane risks through Bermuda-based special-purpose vehicle Everglades Re. Goldman Sachs and Loop Capital managed the issuance, while AIR Worldwide served as risk modeller. The three-year deal follows a $750m, two-year placement that Everglades made on Citizens' behalf last year. Citizens is paying 11.08% on issue 2013-1, down from the 19.07% rate offered on the previous deal and resulting in a near $60m savings for the insurer. The initial attachment point for the latest Everglades Re bond is $5.139bn in Citizens losses, down from $6.35bn for Everglades Re 2012. "This action continues Citizens' goal of transferring risk to the private sector by working closely with nontraditional capital markets and further protecting our policyholders and all taxpayers in Florida", said Citizens chairman Carlos Lacasa. "Citizens has emerged as an international leader in risk transference and our achievements are being recognized by financial markets around the world". Citizens said that it intends to complete its traditional reinsurance programme over the next week for a total of $1.75bn in risk transfer for the 2013 storm season.