GC Securities* Completes Catastrophe Bond Bosphorus Ltd. Series 2015-1 Notes Benefiting the Turkish Catastrophe Insurance Pool

NEW YORK--()--GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of the Series 2015-1 Notes, with notional principal of USD 100,000,000, through the newly formed catastrophe bond shelf program, Bosphorus Ltd., to benefit the Turkish Catastrophe Insurance Pool (“TCIP”). The 2015-1 Notes represent the second time that TCIP has utilized the capital markets to obtain earthquake protection on a parametric basis. TCIP, managed by Eureko Sigorta A.Ş., first accessed the cat bond market in 2013 via the issuance of Bosphorus 1 Re Ltd. and has now sourced USD 500 million in total of catastrophe bond capacity from capital market investors.

The Series 2015-1 Notes provide three years of per occurrence protection for earthquakes affecting the Istanbul region and are triggered based on certain ground motion measurements captured at certain ground motion seismometers that are part of the Istanbul Early Warning and Rapid Response System operated by Boğaziçi University Kandilli Observatory and Earthquake Research Institute (KOERI) with logistical support from the Istanbul Governorate, Istanbul Metropolitan Municipality and First Army Headquarters.

GC Securities served as the sole bookrunner on the transaction. Risk Management Solutions, Inc. served as expertizing modeling firm and calculation agent.

RISK PROFILE

Series 2015-1
Notes

    Size     Rating    

Expected
Maturity

    Coupon
Class A Notes     $100,000,000     Unrated     July 17, 2018     IBRD Note Interest Rate + 3.25%
               

QUOTES

Süha Çele, Executive Board Member of Eureko Sigorta A.Ş.

“We are proud to be the sponsor of Bosphorus Ltd. Our previous bond, Bosphorus 1 Re, was a real success story as it is the first cat bond covering Turkish perils. We are pleased to see that the second bond is also well accepted by the capital markets, which is showing us also that the bond program of TCIP is now well established. In view of the constantly growing portfolio of TCIP, our cooperation with the capital markets will continue in the near future, which would allow TCIP to diversify its reinsurance buying and utilize multi-year capacity at a stable price.”

Remzi Duman, Reinsurance Director responsible for reinsurance affairs of Eureko Sigorta A.Ş.

“The transparent trigger mechanics were understood and accepted by investors, and strong demand made this a highly successful transaction. Bosphorus 1 Re was the first deal from an untapped market, Turkey, and we are happy to sustain our appetite in the ILS market through Bosphorus Ltd.”

David Priebe, Vice Chairman of Guy Carpenter

“The successful execution of Bosphorus Ltd. on behalf of TCIP continues to cement GC Securities’ position as the global market leader for capital markets-based insurance risk transfer solutions for public, governmental and quasi-governmental entities. Marsh & McLennan’s continued commitment to bringing alternative capital solutions for the benefit of our global clients highlights the breadth of the GC Securities platform and continues to allow for Guy Carpenter’s global client base to access alternative capital-based risk transfer solutions.”

Cory Anger, Global Head of ILS Structuring, GC Securities

“We are delighted that TCIP has elected to utilize catastrophe bond-based protection for a second time to complement its traditional reinsurance program and build upon the success of its initial use of catastrophe bonds. After the successful issuance of USD 100 million of the Series 2015-1 Notes, TCIP has now transferred in total USD 500 million of earthquake risk affecting the Istanbul region to the catastrophe bond market. For the Series 2015-1 Notes, TCIP enhanced the initial parametric trigger structure by incorporating three new ground motion seismometers within the parametric index given the continued growth and success of TCIP. The use of an unsubordinated, unsecured note issued by the International Bank for Reconstruction and Development as the collateral solution balances giving investors superior investment yield and diversifying the type of collateral solution that are most common in catastrophe bond transactions while maintaining high investment quality for TCIP. Finally, the use of a derivative (instead of reinsurance) between Bosphorus Ltd. and TCIP allows for speedy recoveries by TCIP once the parametric index value is determined.”

Chi Hum, Global Head of ILS Distribution, GC Securities

“The capital markets have continued to forge a symbiotic relationship with TCIP and this has been demonstrated by the overwhelming investor support given the oversubscription of orders seen during the bookbuilding process for the Bosphorus Ltd. transaction and the broad base of investor participation with more than 20 investors. The investor base was attracted to the diversifying exposure that the Series 2015-1 Notes provide, in addition to a formulated and transparent parametric trigger. GC Securities is honored to have been instrumental in placing the Series 2015-1 Notes with investors on behalf of TCIP.”

About Guy Carpenter

Guy Carpenter & Company, LLC is a global leader in providing risk and reinsurance intermediary services. With over 50 offices worldwide, Guy Carpenter creates and executes reinsurance solutions and delivers capital market solutions* for clients across the globe. The firm’s full breadth of services includes line-of-business expertise in agriculture; aviation; casualty clash; construction and engineering; cyber solutions; excess and umbrella; excess and surplus lines; healthcare & life; marine and energy; mutual insurance companies; political risk and trade credit; professional liability; property; public sector; retrocessional reinsurance; surety; terrorism and workers compensation. GC Fac® is Guy Carpenter’s dedicated global facultative reinsurance unit that provides placement strategies, timely market access and centralized management of facultative reinsurance solutions. In addition, GC Analytics®** utilizes industry-leading quantitative skills and modelling tools that optimize the reinsurance decision-making process and help make the firm’s clients more successful. For more information, visit www.guycarp.com and follow Guy Carpenter on Twitter @GuyCarpenter.

Guy Carpenter is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With annual revenue of $13 billion, Marsh & McLennan’s 57,000 colleagues worldwide provide analysis, advice, and transactional capabilities to clients in more than 130 countries through: Marsh, a leader in insurance broking and risk management; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Marsh & McLennan is committed to being a responsible corporate citizen and making a positive impact in the communities in which it operates. Visit www.mmc.com for more information.

*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

Contacts

Guy Carpenter
Missy DeAngelis, 1-917-937-3118
missy.deangelis@guycarp.com
or
Jennifer Ainslie, 44-207-357-2058
jennifer.ainslie@guycarp.com

Contacts

Guy Carpenter
Missy DeAngelis, 1-917-937-3118
missy.deangelis@guycarp.com
or
Jennifer Ainslie, 44-207-357-2058
jennifer.ainslie@guycarp.com