QUEEN CITY RE CLOSES AT $75M

The American Modern Insurance Group unit of Germany-based reinsurer Munich Re has closed its Queen City Re 2013-1 cat bond offering at the initial offering size of $75m, according to deal bookrunner Willis Capital Markets & Advisory. American Modern said that the issue pricing was substantially oversubscribed, leading to a coupon well below the initial price guidance of 4% to 4.75%. Artemis.bm reported that the final coupon was 3.5%. Queen City Re will provide three years of cover against losses from named storms on an indemnity and per-occurrence basis for the residential property, financial institutions and recreational lines of business of American Modern Re and its subsidiaries. The single tranche appears to cover a wide range of potential loss for American Modern. It has an attachment probability of 1.46%, but the exhaustion probability is reported by Artemis.bm to be only 0.1%. The attachment point is $200m and an exhaustion point of $500m.