Dateline: 20/01/2004
SCHAUMBURG, Ill, January 20, 2004 -- Zurich North America, a leading property-casualty insurance provider, announced that Zurich Emerging Markets Solutions (ZEMS), its political risk and trade credit insurance unit, recently structured a 10-year bond issue for Brazil’s third-largest private sector bank.
The Unibanco issue represented ZEMS second capital markets transaction in Brazil in 2003. Earlier in the year, it provided political risk insurance coverage for a successful bond issue by AmBev, Brazil’s largest beverage company.
According to Daniel Riordan, executive vice president and managing director of Zurich Emerging Markets Solutions: "Political risk insurance coverage is a key component of capital markets transactions that investors in emerging markets are increasingly utilizing to safeguard their transactions. This transaction continues to demonstrate the growing acceptance of PRI, especially at this time of investor interest in this region, in obtaining investment grade or above ratings, as well as our market leadership in this area."
The Unibanco bond was rated by Moody’s at Baa1, well above Moody’s B2 foreign currency rating for Brazil. Citibank, N.A. was the transaction’s lead arranger. Willis, out of New York City, was the insurance broker.
The ZEMS policy protects against certain political risks, including currency inconvertibility and expropriation of funds. The policy provides coverage for up to one year of bond interest payments. A reserve fund was established at closing that contains an amount equal to six months of additional interest. The reserve fund and the PRI policy combine to provide a total of 18 months of protection against political risk events.
Unibanco is Brazil’s oldest private sector bank and ranks third in terms of Brazilian GAAP assets, loans, deposits and stockholders’ equity. Its business comprises retail and wholesale banking, insurance and wealth management.
Zurich Emerging Markets Solutions (www.zurichna.com/politicalrisk) is a global political risk and credit insurance group based in Washington, DC, with offices in London, Barcelona, Hong Kong, Singapore and Tokyo. ZEMS conducts business in over 90 emerging markets and provides political and credit risk solutions to financial institutions, multinational corporations, export credit agencies and multilateral institutions. ZEMS is a member of the Berne Union International, an international union of credit and investment insurers.
Zurich North America (www.zurichna.com) is a leading commercial property-casualty insurance provider serving the multinational, middle market and small business sectors in the United States and Canada. Headquartered in Schaumburg, Ill., Zurich North America has 12,750 employees and wrote $13.6 billion in premiums in 2002. Zurich North America includes the Zurich U.S. business units (Corporate Customer, Middle Markets, Small Business, Strategic Partnerships, Construction, Specialties, Zurich Global Energy and Empire Insurance Companies), as well as Universal Underwriters Group, Zurich North America Canada, Zurich Corporate Solutions and Centre. The Zurich U.S. pool of companies is rated A (excellent) by A.M. Best and A+ (strong) by Standard & Poor's. Zurich North America is a member of Zurich Financial Services.
Zurich Financial Services (www.zurich.com) is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in more than 50 countries and employs about 64,000 people. SWX Swiss Exchange/virt-x: ZURN
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Media contacts:
Sharon Weinstein
Zurich North America
212-225-7241
sharon.weinstein@zurichna.com