Swiss Re Capital Markets has successfully led the issuance of EUR 285 million of insurance-linked securities by Benu Capital Limited ("Benu") on behalf of AXA Global Life, a wholly-owned subsidiary of AXA S.A. The securities cover excess mortality events in France, Japan and the United States. It is the largest excess mortality issuance since 2007.
Swiss Re Capital Markets underwrote the transaction which covers excess mortality events via two classes of Principal At-Risk Variable Rate Notes issued by Benu Capital Limited. Benu Capital Limited (Benu) is an Irish private company incorporated with limited liability. The EUR 135 million Class A notes and the EUR 150 million Class B notes have a five-year risk period starting January 1, 2015.
The proceeds of the Notes each collateralise a counterparty contract with AXA Global Life, providing protection against excess mortality in France, Japan and the U.S. via country age and gender weighted population mortality indices.
Jean-Louis Monnier, Head of ILS Europe at Swiss Re Capital Markets, comments: "We are pleased to provide continued support to AXA Group's strategy in accessing capital markets. This transaction is the largest excess mortality issuance since 2007 and breaks new grounds in terms of structure and risk. AXA Global Life and Swiss Re jointly developed an innovative trigger which more flexibly captures mortality events occurring in any one year or across two calendar years. Moreover, the Class B expands the boundaries of the ILS excess mortality market to higher loss probabilities."
The transaction utilises a putable note, issued by the European Bank for Reconstruction and Development and underwritten by Swiss Re Capital Markets, as collateral for each Class.
This placement is the sixth ILS transaction sponsored by an AXA Group subsidiary and the second covering excess mortality since the 2006 USD 450 million Osiris issuance.
Swiss Re Capital Markets acted as lead structuring agent and joint bookrunner.
Standard & Poor's has published a rating of BB+ (sf) for the Class A notes and BB (sf) for the Class B notes.
The Benu notes were sold pursuant to Rule 144A of the U.S. Securities Act of 1933, as amended (the “Securities Act”) and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject, to the registration requirements of the Securities Act and applicable state securities laws.
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