Aon Corporation (ticker: AON, exchange: NYSE Archipelago Exchange (.N))
News Release -
Aon Capital Markets Places Parametric Index Japanese Earthquake Catastrophe Bond
CHICAGO, May 15 /PRNewswire-FirstCall/ -- Aon Corporation (NYSE: AOC)
today announced that Aon Re Global's investment banking group, Aon Capital
Markets, successfully completed the private placement of $300 million of
principal at-risk variable rate notes for Muteki Ltd. The placement provides
Munich Re with fully collateralized catastrophe protection for Japanese
Zenkyoren, the National Mutual Insurance Federation of Agricultural
Cooperatives, is the ultimate beneficiary of the securitization through an
underlying reinsurance contract with Munich Re. The transaction was
structured with a parametric index trigger, providing recoveries based on the
location and peak ground acceleration of earthquakes as reported by strong
motion seismographs at approximately 1,000 K-NET stations.
Aon Capital Markets was the sole book runner and co-lead placement agent
with Munich Re Capital Markets for the Rule 144A transaction.
"We are pleased to complete our second Japanese earthquake securitization
since the fourth quarter of 2007. The capital markets continue to offer our
clients cost effective capacity that complements traditional reinsurance and
large buyers of catastrophe reinsurance worldwide are utilizing this source of
capital," said Paul Schultz, president of Aon Capital Markets.
The notes were issued by Muteki Ltd., an exempted company in the Cayman
Islands established for this transaction. AIR Worldwide Corporation provided
the risk modeling and analysis for this transaction. The notes were priced at
LIBOR plus 4.40 percent with a maturity of three years and rated Ba2 by
Moody's Investors Service, Inc.
Aon Capital Markets is Aon Re Global's boutique investment bank, providing
clients with strategic advice and access to all forms of capital. Aon Capital
Markets was one of the primary innovators of insurance-linked securities and
recently completed the largest insurance-linked securitization in history.
Since bringing the first ILS deal to the market in 1994, Aon Capital Markets
has brought more than 50 deals to market.
Aon Re Global, the world's leading and most preferred reinsurance
intermediary, provides clients with integrated capital solutions and services
through a world-class network of experts in more than 35 countries. Clients
are better able to differentiate and meet their business objectives with Aon
Re Global's best-in-class treaty and facultative reinsurance placement
services, capital markets expertise, and relevant analytics and technical
expertise, including catastrophe management, actuarial and rating agency
counsel. Aon Re Global was named best reinsurance broker in 2007 and 2006 by
readers of Business Insurance, in 2007 by readers of US Insurer and in 2006 by
readers of Reinsurance.
Aon Corporation (NYSE: AOC) is the leading global provider of risk
management services, insurance and reinsurance brokerage, human capital and
management consulting. Through its 36,000 colleagues worldwide, Aon readily
delivers distinctive client value via innovative and effective risk management
and workforce productivity solutions. Our industry-leading global resources,
technical expertise and industry knowledge are delivered locally through more
than 500 offices in more than 120 countries. Aon was named the world's "best
broker" by Euromoney magazine's 2008 Insurance Survey. Aon also was ranked by
A.M. Best as the number one global insurance brokerage in 2007 based on
brokerage revenues, and voted best insurance intermediary, best reinsurance
intermediary, and best employee benefits consulting firm in 2007 by the
readers of Business Insurance. For more information on Aon, log onto
Rahsaan Johnson of Aon Corporation, +1-312-381-2684,