Aurigen Re In Credit Agricole Transaction
Credit Agricole Securities Inc. today [Dec. 28] announced the placement of CAD $120 million of notes issued by Vecta I Ltd., marking the first securitisation of Canadian life insurance embedded value in a transaction sponsored by Bermuda’s Aurigen Reinsurance Limited [ARL].
Covering a closed block of policies reinsured by Aurigen between 2008 and 2010, the transaction includes a single tranche rated BBB+ by Standard and Poor’s. The notes have an expected maturity of 6.25 years and a coupon rate of 8.0 percent. Credit Agricole Securities was the structuring lead on the financing, and was joint book runner along with Swiss Re Capital Markets.
Principal repayment on the notes is linked to the emergence of future profits on the subject business consisting of 12 life reinsurance treaties underwritten by Aurigen Reinsurance Company, an affiliate of ARL, from six separate life-insurance companies.
Independent third-party risk analysis for the notes was provided by Oliver Wyman.
“We are very excited to have completed the very first Canadian embedded value securitisation,” said Alan Ryder, President and CEO of Aurigen Capital Limited. “The Vecta transaction demonstrates Aurigen’s leadership, innovation and access to the capital markets.
“It greatly diversifies our existing capital structure and provides Aurigen with a substantial amount of additional capital to continue the development of its business.”
”We were delighted to advise Aurigen on this transaction which demonstrates our structuring and placement capabilities in this field,” said Vincent Fleury, Global Securitization Head, Credit Agricole.
The Vecta I notes were sold in a private placement pursuant to Rule 144A of the US Securities Act of 1933, as amended, they 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.
Crédit Agricole Corporate and Investment Bank is the corporate and investment banking arm of the Crédit Agricole Group. With approximately 13,000 employees in more than 50 countries, Crédit Agricole CIB offers its clients a comprehensive range of products and services in capital markets, brokerage, investment banking, structured finance, corporate banking and international private banking.
In the Americas, Crédit Agricole CIB provides the latest in financial products and services for its corporate and institutional clients, including loan syndication, project financing, global equity research and trading, as well as capital markets services in the areas of debt and capital raising and derivative hedges. The bank has a US presence in New York, Chicago and Houston, a Canadian presence in Montreal, and a Latin American presence in Mexico, Brazil, and Argentina.
Canada’s Aurigen Capital Limited is the holding company for the Aurigen Group of companies. Its core business is the reinsurance of individual life insurance policies. Its operating life reinsurance companies are Aurigen Reinsurance Company, licensed to transact life reinsurance in Canada, and Aurigen Reinsurance Limited, licensed to transact long term business in Bermuda.
Each has financial strength ratings of A- from A.M. Best. Aurigen Group has life reinsurance in force in excess of CAD $20 billion and consolidated assets in excess of CAD $250 million.
