AON Capital Markets Places $225 Million U.S. Earthquake and U.S. Hurricane Catastrophe Bonds

Aon Corporation announced this week that its investment banking group, Aon Capital Markets, successfully completed the private placement of $225 million of principal at-risk variable rate notes for Newton Re Limited in two separate classes of notes. The placements provide Catlin Insurance Company Ltd. with fully collateralized catastrophe protection of $87.5 million for U.S. earthquake risk and $137.5 million for U.S. hurricane risk.  
  
The $87.5 million of Class A Notes are exposed to U.S. earthquake events and the $137.5 million of Class B Notes are exposed to U.S. hurricane events. The notes were issued by Newton Re Limited, a Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands. Risk Management Solutions, Inc. provided the risk modeling and analysis for this transaction. For each class of notes, a risk transfer contract provides formula-driven recovery, which takes into consideration specific payout factors multiplied by the industry loss amount applicable to a covered event as published by the Property Claim Services.  
  
Aon Capital Markets and J.P. Morgan Securities Inc were joint lead placement agents.  
  
"The capital markets continue to provide meaningful capacity for our clients," said Paul Schultz, president of Aon Capital Markets. "Once again, Aon Re Global's dynamic execution platform offers our clients alternative risk transfer solutions by providing access to traditional markets through Aon's broker network and capital markets through Aon Capital Markets."  
  
These securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to U.S. persons except in accordance with the resale restrictions applicable thereto. These securities having been previously sold, this announcement appears as a matter of record only.  
  
About Aon  
  
Aon Capital Markets is Aon Re Global's boutique investment bank, providing clients with strategic advice and access to all forms of capital. Aon Capital Markets was one of the primary innovators of insurance-linked securities and recently completed the largest insurance-linked securitization in history. Since bringing the first ILS deal to the market in 1994, Aon Capital Markets has brought more than 50 deals to market.  
  
Aon Re Global, the world's leading and most preferred reinsurance intermediary, provides clients with integrated capital solutions and services through a world-class network of experts in more than 35 countries. Clients are better able to differentiate and meet their business objectives with Aon Re Global's best-in-class treaty and facultative reinsurance placement services, capital markets expertise, and relevant analytics and technical expertise, including catastrophe management, actuarial, and rating agency counsel. Aon Re Global was named best reinsurance broker in 2007 and 2006.