The first ever listing of catastrophe bonds has been made on the Bermuda Stock Exchange Index (BSX) after Valais Re Ltd.'s Principal At-Risk Variable Note Programme listing was approved by the Exchange.

The programme, along with two classes of Series 2008-1 Notes, will now be listed as a form of capital raising for the reinsurance company. 'Cat' bonds are structured debt instruments that transfer risk associated with low frequency, high severity events to the capital markets. They have been around since the industry faced similar capacity challenges after Hurricane Andrew in 1992.

The move is significant in that, in the past, a number of Bermuda-based reinsurers have listed their cat bonds on the Cayman Islands Stock Exchange for convenience.

But the BSX now hopes that other reinsurance companies will follow Valais' lead and list in Bermuda in the future.

Greg Wojchiechowski, president and CEO of the BSX, said the Exchange was well positioned to support this kind of business in the same jurisdiction where they are originating from at the same time as the such listings being adding value to the Island's insurance industry.

"I am delighted for our first cat bond listing on the BSX and this will underscore the BSX's commitment to supporting the insurance industry in Bermuda," he said. Valais Re is a Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands.

Yesterday, The Royal Gazette revealed that Flagstone had bought three-year fully collateralised retrocessional coverage on an indemnity basis from Valais Re, which offers Flagstone indemnity protection on its global reinsurance portfolio through two separate tranches.

Capital G BSX Services Ltd. sponsored the listing of both the programme and the initial two classes of Series 2008-1 Notes.