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AIG
AIG today announced that it has entered into a reinsurance transaction with
Compass Re Ltd., which will provide $400 million of peak-zone protection
against U.S. hurricanes and earthquakes. To fund its potential obligations to
AIG, Compass Re Ltd. issued a $400 million catastrophe bond in a single
tranche.
The transaction closed on December 27, 2012 and provides AIG with fully
collateralized coverage against the losses described above on a per-occurrence
basis (under a reinsurance agreement related to the notes) through December
2014 using an index trigger with state-specific payment factors. With this
transaction, AIG has sponsored $1.85 billion in catastrophe bonds over the
past three years, enhancing its role as a market leader in the catastrophe
bond marketplace.
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