A $100 million catastrophe bond to cover Turkey against earthquakes has been set up in Bermuda.

Now the Turkish Catastrophe Insurance Pool (TCIP) plans to continue to build its relationship with the market.

The Bosphorus Ltd bond provides reinsurance protection across three years on a per-occurrence basis for earthquakes in the Istanbul area.

The transaction — the second of its kind — was completed with the support of reinsurance broker Guy Carpenter’s investment banking and ILS unit GC Securities.

Suha Cele, executive board member of Eureko Sigorta, the insurer that manages TCIP, said: “In view of the constantly growing portfolio of TCIP, our co-operation with the capital markets will continue in the near future, which would allow TCIP to diversify its reinsurance buying and utilise multiyear capacity at a stable price.”

He added: “We are proud to be the sponsor of Bosphorus Ltd. Our previous bond, Bosphorus 1 Re was a real success story as it is the first cat bond covering Turkish perils.

“We are pleased to see that the second bond is also well accepted by the capital markets, which is showing us also that the bond programme of TCIP is well-established.”

The TCIP risk pool has now sourced $500 million in total of catastrophe bond capacity from capital market investors, following the $400 million Bosphorus 1 Re Ltd deal in 2013.

The transaction’s trigger is based on ground motion measurements captured by seismometers that are part of the Istanbul Early Warning and Rapid Response System, operated by academic institutions in Turkey.

GC Securities global head of ILS structuring Cory Anger said: “We are delighted that TCIP has elected to utilise catastrophe bond-based protection for a second time to complement its traditional reinsurance programme and build upon the success of its initial use of catastrophe bonds.”

She added: “The use of an unsubordinated, unsecured note issued by the International Bank for Reconstruction and Development as the collateral solution balances giving investors superior investment yield and diversifying the type of collateral solution that are most common in catastrophe bond transactions while maintaining high investment quality for TCIP.”