MUNICH (Bloomberg) ? Hannover Re, the world?s fourth-biggest reinsurer, sold $150 million of so-called catastrophe bonds to help limit losses on claims that may arise from severe windstorms in Western Europe.

Hannover Re sold the bond to institutional investors in Europe and North America via a special-purpose company called Eurus Ltd., the Hanover, Germany-based reinsurer said in a statement yesterday. The bond helps protect Hannover Re against European windstorm claims for about three years starting now, the reinsurer said.

?Through Eurus we have been able to transfer one of our peak natural catastrophe exposures to the capital market,? Hannover Re Chief Executive Officer Wilhelm Zeller said in the statement.

Hannover Re has already transferred natural catastrophe risks to the capital market on six previous occasions in the form of private placements. ?Eurus is the first transaction where the bond certificates can also be traded on a secondary market,? Zeller added.

The bond covers wind storms in Belgium, Denmark, France, Germany, Ireland, Netherlands and the UK, Hannover Re said. The reinsurer may recover customers? claims in the event of a 1-in-50-year storm in the region, Hannover Re spokeswoman Kartin Seubert said in a telephone interview today. The bonds will mainly protect Hannover Re from winter storms, she added.

The bonds will pay a floating rate of interest of 6.25 percent above the Libor benchmark, Seubert said.

The three-month dollar- denominated London interbank offered rate, an average of rates set daily by banks, was 5.47 percent at 11 a.m. in London yesterday.

Catastrophe bonds typically pay fixed payments unless a pre- determined event occurs, helping the seller to meet the cost of insurance claims.

As a result, catastrophe bonds pay more interest and have a lower rating than an issuer?s other bonds.