What’s New: In Brief (June 29, 2007)

Swiss Re has created what it says are the first catastrophe bond indices on the market, A.M. Best has reported, giving the market better information on returns related to risk.
Richard Pennay, in the structuring department at Swiss Re Capital Markets, told A.M. Best that Swiss Re had introduced the indices to provide more transparency in the cat bond market especially when it comes to the rate of return available from such bonds when compared with the amount of risk.
According to A.M. Best, the reinsurer said its Swiss Re Cat Bond Indices are performance indices set up to track the price return and total rate of return of a main basket of bonds and a further three sub-baskets of dollar-denominated catastrophe bonds.
Among the three sub-baskets, one is made up of single-peril United States wind catastrophe bonds, the second is composed of single-peril California earthquake catastrophe bonds and the final one is made up of catastrophe bonds that have been rated as being BB, or below investment grade.
Swiss Re described the bonds within the main basket as being made up of all dollar-denominated catastrophe bonds outstanding.

Flagstone Reinsurance Holdings Limited (NYSE:FSR), a global reinsurance company formed and headquartered in Bermuda, has raised US$100 million through two private sales of junior subordinated deferrable interest debentures (“deferrable interest debentures”).
The additional capital will be used to increase the capacity of Flagstone’s underwriting operations, Flagstone reported in a press release.
The deferrable interest debentures have a floating rate of interest equal to three-month LIBOR plus 300 basis points, reset quarterly. The deferrable interest debentures mature on July 30, 2037, and may be called at par by the company any time after July 30, 2012.
The deferrable interest debentures will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.