GC Securities, a Division of MMC Securities Corp., Completes First Catastrophe Bond To Use Paradex Trigger for U.S. Hurricane, U.S. Earthquake and Japan Typhoon to Benefit Flagstone Re

GC Securities, a provider of investment banking services to the (re)insurance industry and affiliate of Guy Carpenter & Company, LLC, has successfully structured and placed USD210 million of protection through an existing catastrophe bond shelf program, Montana Re Ltd., to benefit Flagstone Re. The Series 2010-1 Notes cover, for the first time, hurricane events in the Cayman Islands as well as U.S. hurricane, U.S. earthquake, Europe windstorm, Japan typhoon and Japan earthquake risks.

Providing protection on an occurrence basis for the Class C and D Notes and on a second and/or subsequent event annual aggregate basis for the Class E Notes, the issuance is the first to use the Paradex trigger for U.S. hurricane, U.S. earthquake and Japan typhoon events. The three-year notes have a scheduled for redemption date of January 8, 2014.

The Montana Re issuance provides Flagstone Re with USD210 million of fully collateralized, multi-year protection for a broad range of natural catastrophes in the United States, Europe and Japan.

GC Securities acted as the sole structuring agent, sole manager and sole bookrunner for the offering. This marks GC Securities’ sixth transaction of 2010, securing over USD1.2 billion of capital markets protection for its clients.

QUOTES

Bill Kennedy, CEO of Global Analytics, Capital Markets, Specialty Practices and Advisory, Guy Carpenter & Company

"We are pleased to support Flagstone Re’s risk management objectives with a transaction that is the first to cover Cayman Islands events and benefits from the strategic use of the Paradex Index."

Chi Hum, Head of Global ILS Distribution, GC Securites

"While typical ILS transactions are thought to be between 1-2 percent expected loss, this transaction further demonstrates the ability of capital markets investors to support a variety of risk profiles and structures. The Class D Notes, with an expected loss greater than 6.5 percent, were broadly supported with significant interest from the ILS investor base.”

Brent Slade, Chief Marketing Officer, Flagstone Re

"We are very pleased with the results and efficiency of this transaction. This marks the third such issuance we have sponsored and is testament to our ability to continually access the capital markets in creative ways and increase our capital flexibility.”

TAGS/KEYWORDS

Guy Carpenter, GC Securities, Flagstone Re, Montana Re, Paradex, catastrophe bond, cat bond, ILS, Cayman Islands, hurricane, earthquake, windstorm, typhoon, Kennedy, Hum

About Guy Carpenter

Guy Carpenter & Company, LLC is the world’s leading risk and reinsurance specialist and a member of Marsh & McLennan Companies. With over 50 offices worldwide, Guy Carpenter creates and executes reinsurance solutions and delivers capital market solutions* for clients across the globe. The firm’s full breadth of services includes line of business expertise in Agriculture; Aviation; Casualty Clash; Construction and Engineering; Excess and Umbrella; Life, Accident and Health; Marine and Energy; Medical Professional Liability; Political Risk and Trade Credit; Professional Liability; Property; Retrocessional Reinsurance; Surety; Terrorism and Workers Compensation. GCFac® is Guy Carpenter’s dedicated global facultative reinsurance unit that provides placement strategies, timely market access and centralized management of facultative reinsurance solutions. In addition, GC Analytics™ utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance decision-making process and help make the firm’s clients more successful. Guy Carpenter’s website address is www.guycarp.com.

GC Securities* provides investment banking services to the (re)insurance industry, extending the traditional reinsurance services of Guy Carpenter & Company, LLC, the world’s leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies. With its team of seasoned professionals, GC Securities offers a full range of corporate finance and capital markets-based risk transfer solutions that complement Guy Carpenter’s strong industry relationships, analytical capabilities and reinsurance expertise. GC Securities’ Capital Markets group is a recognized leader in insurance-linked securities (ILS) solutions and helps clients plan, structure and issue catastrophe bonds, sidecars and other forms of ILS, thereby enabling clients to access capital markets capacity to transfer risk and maximize return on capital. GC Securities’ Corporate Finance group advises clients on mergers, acquisitions and divestitures, private debt and equity raising, as well as the development of rigorous capital plans that encompass the full array of available capital options.

Guy Carpenter’s intellectual capital website, www.GCCapitalIdeas.com, leverages blog technology, including Real Simple Syndication (RSS) feeds and searchable category tags, to deliver Guy Carpenter’s latest research as soon as it is posted. In addition, articles can be delivered directly to BlackBerrys and other handheld devices.

* Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

This communication does not constitute an offer to sell or the solicitation of an offer to buy the securities mentioned herein in any jurisdiction in which such an offer or solicitation is illegal. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act”), and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.