Nomura to offer catastrophe risk hedging
Nomura Securities will provide its Japanese clients with risk hedging to transfer catastrophe-related risk to the capital markets via derivatives and catastrophe bonds.
In its first deal, Nomura arranged an earthquake derivative between East Japan Railway Company and German reinsurance company Munich Re.
The derivative carries a $260 million notional principal and tenure of five years. East Japan Railway Company will pay a yen-denominated premium and will receive a US dollar payment in the event of an earthquake in the southern Kanto region of Japan if the magnitude exceeds a predetermined level.
Munich Re, the recipient of the earthquake risk from East Japan
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