The first catastrophe bond to be sponsored by a Brazilian company has been issued in partnership with the insurance-linked securities arm of Bermudian reinsurer Validus Holdings.

AlphaCat Managers Ltd teamed up with Terra Brasis Resseguros SA to complete the $5 million private catastrophe bond transaction. The bond issue, named Alpha Terra Validus I, represents a unique offering of Latin American reinsurance risk on an indemnity basis, Validus stated.

Alpha Terra Validus I was issued through a segregated account of White Rock Insurance (SAC) Ltd, which is managed by Aon Insurance Managers (Bermuda) Ltd. The notes were admitted to the Bermuda Stock Exchange as of February 6, 2017 and will remain listed there until maturity.

Lixin Zeng, the CEO of AlphaCat, said: “We are pleased to have partnered with Terra Brasis Re in bringing this innovative transaction to market and look forward to working together in the future.”

Rodrigo Botti, the director of Terra Brasis Re, said: “The partnership with AlphaCat will significantly contribute to the development of the Latin American insurance and reinsurance markets, as it brings capital markets based solutions to the region’s exposures.”