A catastrophe bond with providing coverage for Australian perils has been placed in Bermuda.

Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, announced it had underwritten a $250 million catastrophe bond issued by VenTerra Re Ltd, a Bermuda-based special purpose insurer.

The coverage will provide subsidiaries of Australia-based insurer QBE Insurance Group Ltd (QBE) with $250 million of multi-year collateralised protection against US and Australia earthquakes and Australia cyclones on an indemnity basis for a period of three years from January 1, 2014”, according to a statement from Aon Benfield yesterday.

It added: “VenTerra Re Ltd is the first-ever catastrophe bond that has secured coverage for Australian perils for a primary insurance company on an indemnity basis.”

The bond adds to the near $10

Jim Fiore, chief reinsurance officer at QBE, said this was the first catastrophe bond sponsored by QBE and it had been “received very well among investors”.

The VenTerra Re Ltd. $250,000,000 Series 2013-1 Class A Principal At-Risk Variable Rate Notes were priced at 3.75 percent above the yield on the underlying money market fund collateral. The notes are rated BB(sf) by Standard & Poor’s. Risk Management Solutions, Inc provided the risk analysis for the transaction.