May 30 - (The Insurer) - Italy-based insurer Generali has returned to the insurance-linked securities $(ILS)$ market with a new catastrophe bond issuance, securing 200 million euros ($227 million) in coverage for windstorms in Europe and earthquakes in Italy.

The Trieste-headquartered insurer has entered into collateralised multi-year reinsurance agreements with Lion Re DAC, its multi-arrangement special purpose vehicle domiciled in Ireland, to provide cover for the group’s losses over a four-year period.

The deal aims to cover losses from windstorms in Europe and earthquakes in Italy, and includes catastrophe bond issuance with distinctive ESG features, Generali said in a statement on Thursday.

Lion Re DAC issued two classes of notes: 125 million euros in Class A notes covering both perils, and 75 million euros in Class B notes covering only earthquakes in Italy.

The bonds were placed with capital market investors under a Rule 144A offering and were priced at a premium of 5.5% and 6% per annum, respectively.

The company highlighted that all or a portion of the interest and principal payable with regards to the issued notes will be reduced in case of losses sustained by Generali owing to the calamities exceeding a predefined threshold for each event.

This is the second Generali-sponsored ILS transaction under its updated Green, Social and Sustainability ILS Framework.

Bond proceeds will be invested in AAA-rated green notes issued by the European Bank for Reconstruction and Development, while the freed-up capital will be allocated to eligible green and social projects.

Lion Re DAC’s SPV structure allows for future catastrophe bond issuances under a shelf programme. Aon Securities and GC Securities acted as joint structuring agents and bookrunners.

Generali executives said the transaction reaffirms the firm’s strong relationship with ILS investors and its commitment to ESG integration.

Generali Group’s general manager Marco Sesana said: “The ILS capital is completely integrated and complementary to our traditional reinsurance strategy. This transaction reflects the continued trust in the quality of our portfolio and our disciplined approach to risk management.”