S&P Says KAMP RE 2005 ‘Imminent Default Probable’

November 6, 2007

Standard & Poor’s Ratings Services announced that it has received a copy of a proof-of-claim notice from the administrator for KAMP RE 2005 Ltd., which “puts the ultimate net losses in excess of the transaction’s $1 billion trigger amount.”

KAMP RE is the first, and so far the largest, special purpose vehicle to post a significant loss on its cat bonds. Hurricane Katrina’s devastation has apparently resulted in a total loss to the KAMP RE 2005 Ltd. issuance, a $190 million dollar transaction (See IJ web site Feb. 27, 2006).

S&P explained that “KPMG Cayman Islands, the claims reviewer, will have 20 calendar days from receipt of the notice to evaluate the claim. If KPMG Cayman Islands provides a claims review letter with a verified amount of paid losses in excess of the trigger amount, KAMP RE 2005 Ltd. will make a reinsurance payment to Swiss Reinsurance America Corp. by Dec. 14, 2007.”

S&P credit analyst Gary Martucci added that “upon receipt of a copy of the claims review letter, we will revise the rating on KAMP RE’s 2005 Ltd.’s $190 million floating-rate, principal-at-risk notes to ‘D’ from ‘CC’. Until that time, the rating on the notes remains on CreditWatch with negative implications, where it was placed on Oct. 5, 2005.”

Source: S&P – www.standardandpoors.com

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