Hannover Re boosted its "K6" catastrophe bond transaction, which was launched in 2009, by the maximum targeted amount of $152 million.
The total volume of the “K6” transaction is now at $329 million. The additional paper was taken up by new and existing investors. Hannover Re said that investor demand outstripped supply.
The additional interests in the "K6" transaction were taken out in the form of three-year contracts, which means that in future only part of the "K6" quota share will be renewed at year-end. The transaction was placed with institutional investors worldwide.
The portfolio assembled for the "K6" securitization consists of non-proportional reinsurance treaties in the property catastrophe, aviation and marine (including offshore) lines.
"Our latest capital market transaction serves to complement our traditional program of protection cover, which we use to protect against peak exposures such as natural catastrophes," said CEO Ulrich Wallin. "Our investors enjoy extremely attractive returns given a normal experience of the covered portfolio. What is more, they are able to diversify their own portfolio and exclude the usual interest rate risks associated with other capital market products."