What’s New: In Brief (March 27, 2007)

Ontarios Court of Appeal has overturned a judges order for Royal & SunAlliance Insurance Group Plc, along with 5 other insurers, to pay Canadian National Railway Co. (CN) $30 million to cover a failure of a tunnel-boring machine, reports the Montreal Gazette. CN should have known the machine had a faulty design and the insurance companies were covered by a clause that doesnt provide payment in such cases, according to the Gazette. The machine broke while digging a tunnel between Sarnia, Ont. and Port Huron, Michigan.

Swiss Re closed its placement of GBP 500 million [approximately Cdn $1.14 billion] of hybrid capital. The offering was structured using a repackaging vehicle that issued notes secured over perpetual subordinated step-up loan notes issued by Swiss Reinsurance Company, explains a company statement. This transaction represents financing for general corporate purposes. The Sterling market was chosen as it provided additional investor diversification and efficient execution. Strong demand by both UK and international institutional fixed-income investors led to an attractive pricing, the release notes. For the first 12 years the coupon was set at 6.3024%.