Swiss Re planning new Successor X cat bond -S&P

LONDON Jan 28 (Reuters) - Swiss Re RUKN.VX plans to add to its long running catastrophe bond series by launching the first transaction in 2011 under its Successor X shelf programme, credit rating agency Standard & Poor's said on Friday.

S&P said in a report that the world's second-biggest reinsurer was preparing to sell the class IV-E3 notes to cover itself against hurricane losses in some U.S. states and Puerto Rico and California earthquakes until December 2014.

"This is the fourth set of notes issued under the programme," said S&P. Swiss Re issued another takedown from the Successor X programme in December, which also provided protection against Australian earthquake losses. [IDn:LDE6B629V]

The catastrophe bond sector, through which insurers transfer risks associated with natural disasters to capital markets investors, finished 2010 with a total of $5 billion in issuance through 26 natural catastrophe and life transactions.

Reinsurers and brokers expect issuance to reach up to $6 billion in 2011.

World No.1 reinsurer Munich Re MUGVn.DE, Aon Benfield Securities, part of top reinsurance broker Aon Benfield (AON.N), and Willis Capital Markets & Advisory (WCAM), a unit of rival insurance broker Willis (WSH.N), all expect substantial growth in issuance this year. [IDn:LDE70N14G] [IDn:LDE70H1YA]

The latest risk transfer contract from Swiss Re will be issued through Cayman Islands-based Successor X- Series 2011-2. Issue size is not yet known, but S&P said it had assigned a B rating to the deal.

Prior Successor programmes have allowed Swiss Re to obtain more than $1.7 billion of protection.

The deal will use highly rated International Bank for Reconstruction and Development (IBRD) notes as investment collateral, according to the rating agency.

EQECAT will provide risk modelling services for the bond.

--For more details on cat bond transactions, see the Thomson Reuters Insurance Linked Securities Community, or email reutersils@reuters.com. (Editing by Catherine Evans)