Lehman Brothers is heard preparing the next "Triple X" life insurance securitization, a $100 million-range deal set to close sometime this month, sources said. A triple-A wrap is expected.
The first of these deals hit the market last summer, also through Lehman, for the benefit of issuer First Colony Life, a subsidiary of GE Financial. First Colony came again in December. Both deals were $300 million in size.
The First Colony Triple X deals take advantage of new laws in South Carolina to facilitate insurance securitization. Triple X regulation requires life insurance companies to hold substantially higher cash reserves on term life policies. Many companies are feeling the pinch of constrained capital, and have looked at securitization as a way to free up the cash.
These deals are typically structured as 144As. Several more transactions are in the works, sources said.
More details on the pending deal will follow.
See ASR 11/03/03 for prior coverage.