Aspen Completes $100 Million California Earthquake Catastrophe Financing Under $1 Billion Shelf Program and Announces $100 Milli
26 April 2007 - 6:54AM
Business Wire
Aspen Insurance Holdings Limited ("Aspen�) (NYSE:AHL) today
announced two separate collateralized reinsurance contracts to
protect its balance sheet against severe California Earthquake and
US wind events. Aspen has entered into a multi-year property
catastrophe reinsurance agreement with Ajax Re Limited (�Ajax Re�),
a Cayman Islands domiciled reinsurer, to provide up to $100 million
of reinsurance coverage for Aspen�s insurance subsidiaries in the
event of one or more California earthquakes. The reinsurance
agreement is fully collateralized by proceeds received by Ajax Re
from the issuance of catastrophe bonds, and its reinsurance limit
is proportionally available based on industry insured losses
between $23.1 billion and $25.9 billion in the covered area, as
reported by Property Claim Services ("PCS"). The full $100 million
available is exhausted when the reported industry insured losses by
PCS reach $25.9 billion. This transaction coincides with the
expiration of the Company�s existing catastrophe swap agreement and
provides Aspen with coverage effective from August 18, 2007 through
May 1, 2009. Ajax Re is a special purpose Cayman Islands exempted
company licensed as a restricted Class B insurer in the Cayman
Islands and formed solely for the purpose of entering into certain
reinsurance agreements and other risk transfer agreements with
subsidiaries of Aspen to provide up to $1 billion of reinsurance
protection covering various perils. The protection provided by Ajax
Re will be funded through the issuance of one or more distinct
series of notes (the �Notes�) to qualified institutional buyers in
permitted jurisdictions as part of Ajax Re�s $1 billion principal
at-risk variable rate note program. In a separate transaction,
Aspen intends, subject to completion of contractual arrangements,
to enter into a $100 million Industry Loss Warranty (�ILW�)
Reinsurance Contract to provide protection against United States
catastrophic wind events. The ILW is structured in three layers,
with trigger points ranging from $30 billion to $50 billion in
industry losses as reported by PCS. Commenting on the financings,
Chris O�Kane, Aspen�s Chief Executive Officer said: �Aspen
continues to manage catastrophe risk exposures by using a
combination of capital markets and traditional reinsurance. These
transactions enable us to protect our balance sheet from exposure
to significant specific perils and support our ratings.� This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the Notes in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. The Notes have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the �Securities Act�), and may not be offered or sold in
the United States absent registration under the Securities Act or
an applicable exemption from the registration requirements
thereunder. About Aspen Insurance Holdings Limited Aspen Insurance
Holdings Limited was established in June 2002. Aspen is a Bermudian
holding company that provides property and casualty reinsurance in
the global market, property and liability insurance principally in
the United Kingdom and the United States and specialty insurance
and reinsurance consisting mainly of marine and energy and aviation
worldwide. Aspen�s operations are conducted through its
wholly-owned subsidiaries located in London, Bermuda and the United
States: Aspen Insurance UK Limited, Aspen Insurance Limited and
Aspen Specialty Insurance Company. Aspen has four operating
segments: property reinsurance, casualty reinsurance, specialty
insurance and reinsurance and property and casualty insurance. For
more information about Aspen, please visit the Company�s website at
www.aspen.bm. Application of the Safe Harbor of the Private
Securities Litigation Reform Act of 1995 This press release
contains written, and Aspen's officers may make related oral,
"forward-looking statements" within the meaning of the U.S. federal
securities laws regarding Aspen's initial outlook for certain
operating results for 2007, the possible repurchase of Aspen's
ordinary shares and the financing of any such repurchases. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that do not relate solely to
historical or current facts, and can be identified by the use of
words such as "expect," "intend," "plan," "believe," "project,"
"anticipate," "seek," "will," "estimate," "may," "continue," and
similar expressions of a future or forward-looking nature. All
forward-looking statements rely on a number of assumptions,
estimates and data concerning future results and events and are
subject to a number of uncertainties and other factors, many of
which are outside Aspen's control that could cause actual results
to differ materially from such statements. For a detailed
description of uncertainties and other factors that could impact
the forward-looking statements in this release, please see the
"Risk Factors" section in Aspen's Annual Report on Form 10-K for
the year ended December 31, 2006, filed with the U.S. Securities
and Exchange Commission on February 22, 2007.
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