Sovereign Risk Insurance Ltd, Bermuda-based political risk insurance joint venture between ACE limited and XL Capital Ltd, is offering a political risk product for cross border capital markets transactions.
This covers bond offerings by emerging market issuers against currency inconvertibility and currency nontransfer risks in the issuer's country, to allow issuers in emerging markets to achieve higher foreign currency ratings from ratings agencies on the insured bond offerings. With higher ratings, the issuers will be able to attract funding
from a broader range of investors and reduce their financing costs.
Sovereign has per project limits of S125m and can provide terms out to 15 years, making the coverage particularly suitable for cross border 144A bond offerings and private placements.
