Tokyo, March 18, 2014 - Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, today announced that it has successfully completed the private placement of USD245 million of principal at-risk variable notes for Kizuna Re II Ltd. 

The placement provides Tokio Marine & Nichido Fire Insurance with fully collateralized catastrophe protection for Japanese earthquake risk.  Kizuna Re II Ltd. was the second catastrophe bond transaction sponsored by Tokio Marine & Nichido Fire using an indemnity trigger after the issuance of Kizuna Re Ltd. in 2011 which was also arranged by Aon Benfield Securities. 

Takashi Oka, Head of Reinsurance of Tokio Marine & Nichido Fire, said: “We are proud to announce the successful catastrophe bond issuance under Kizuna Re II. It was quite a challenge to become the precursor of issuing the first earthquake indemnity catastrophe bond covering commercial and industrial exposures in Japan.  We are pleased that through this issuance we were able to broaden and deepen relationships with the capital market investors, which we have been cultivating since the issuance under Kizuna Re Ltd.”

Aon Benfield Securities was the sole book runner and sole placement agent for the Rule 144A transaction.

Paul Schultz, Chief Executive Officer of Aon Benfield Securities, said: “After the proven success of Kizuna Re Ltd. in 2011, we are pleased to have successfully placed Kizuna Re II Ltd. on terms attractive to Tokio Marine & Nichido Fire Insurance.  Investors were very supportive of the transaction, demonstrating both the high quality of the sponsor as well as the attractiveness of Japan earthquake risk as a diversifying peril in the ILS market.”

The two tranches of notes were issued by Kizuna Re II Ltd., an exempted company in Bermuda, which was established for this transaction.  Class A was issued at a size of USD200 million and priced at 2.25 percent above money market return with a maturity of four years. Class B was issued at a size of USD45 million and priced at 2.50 percent above money market return with the same maturity. 

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