Nomura to offer catastrophe risk hedging

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 Jap

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