london (Bloomberg) — Scor SE, France's biggest reinsurer, sold $200 million of three-year bonds to transfer the risk of losses on US earthquakes and hurricanes, the first issue of its kind since the collapse of Lehman Brothers Holdings Inc.

"Scor's deal should be a breakthrough for catastrophe bonds," said Christian Bruns, a fund manager at Clariden Leu in Zurich. He bought Paris-based Scor's notes and expects more so-called cat bonds to be sold this year.

The market for catastrophe bonds was hurt by Lehman's failure in September because some deals relied on the bank to guarantee assets used to make coupon payments. One issuer, Allstate Corp.'s Willow Re Ltd., didn't make a full interest payment this month, the second cat bond to default in a decade.

Scor's deal offers investors more information on the assets backing the bonds than on previous transactions, said Karsten Bromann, chief risk officer at Solidum Partners AG, a Zurich- based hedge fund.

"Investors are being updated on a regular basis about the collateral portfolio, which can only be invested in high-grade assets such as government-backed debt," said Bromann, who bought the Scor bonds.

Insurers sell cat bonds to protect against natural disasters, and buyers demand higher yields because they risk losing their investment if the catastrophe is large enough.

A $100 million portion of Paris-based Scor's issue will pay interest of 11.5 percentage points more than the London interbank offered rate, and two $50 million notes will pay 12.5 and 14.5 percentage points.

The notes were issued through Atlas V Capital Ltd., a company created to issue the debt and sell reinsurance to a Scor unit. The debt may be rated below investment-grade status by Standard & Poor's, Bloomberg data show.

Catastrophe bonds returned 2.9 percent since January last year, according to the Swiss Re Cat Bond Total Return Index. Similar-rated corporate bonds handed investors a loss of almost 22 percent in the same period, Merrill Lynch & Co. data show.

"2009 should be a good year for cat bonds," said Christophe Fritsch, head of insurance-linked securities at Axa Investment Managers in Paris. "Insurers need alternative capacity and investors want decorrelated assets."

Scor spokesman Beat Werder wasn't immediately available for comment.