PXRE Group Ltd. expects a $75-$95 million hit from Hurricane Wilma assuming that the insured industry losses caused by Hurricane Wilma in Mexico and the United States will be approximately $14.5 billion.

The Bermuda-based property catastrophe reinsurer, which cautioned that the estimate was preliminary, also announced yesterday that it had acquired $300 million collateralized reinsurance to protect it from extreme catastrophe losses arising from hurricanes in the Eastern and Gulf coasts of the United States, windstorms in northern Europe and earthquakes in California.

Atlantic & Western Re financed the reinsurance coverage through the issuance of $300 million in catastrophe bonds with Goldman, Sachs & Co. as the placement agent for the transaction. The special-purpose, Cayman Islands exempted company formed solely to issue variable-rate notes and enter into a reinsurance contract with PXRE Reinsurance Ltd.

The agreement provides two layers of protection over the next five years. The first layer provides $200 million of coverage for losses arising from hurricanes on the Eastern and Gulf coasts of the United States, windstorms in northern Europe and earthquakes in California. The second layer provides $100 million of coverage for losses arising from hurricanes on the Eastern and Gulf coasts of the United States and windstorms in northern Europe.

Jeffrey L. Radke, president and chief executive officer of PXRE, said: ?With the completion of this transaction, we are supplementing our risk management program to provide further insulation for our equity from large but remote catastrophe events.

?The $300 million of new risk capital provided by this multi-year collateralized reinsurance, when combined with our existing capital, provides us with significant additional resources to meet our obligations to our clients in even the most extreme loss scenarios.?

Mr. Radke added that the PXRE?s speedy execution of the transaction following Hurricanes Katrina, Rita and Wilma at an 8.7 percent annual cost of capital will prove to be a competitive advantage in the coming renewal season.

Under the reinsurance contract, A&W will make specified payments if any of the covered perils occurs and causes modelled losses above a specified threshold. Proceeds from the notes? issuance collateralize A&W?s obligations under the reinsurance contract.

Fitch Ratings, which assigned the $100 million class A variable-rate notes due November 15, 2010 a ?BB? and the $200 million class B variable-rate notes due November 15, 2010 a ?B?, said the ratings of the notes address the likelihood that investors will receive payment of interest and principal in accordance with terms of the transaction documents.