Munich Re has again used the capital markets to acquire coverage for Australian cyclone and US hurricane risks with a total volume of $US100 million ($110 million).

The coverage comes via a catastrophe bond issued by reinsurance vehicle Queen Street IX Re Limited, which is registered in Ireland.

The bond will mature on June 8 2017, and Munich Re says it has been “well received by the market”. The bond has been placed globally among a “broadly diversified group of international investors”, who will receive a risk premium of 5.5% a year.

The bond covers losses from extreme events with a statistical return period of between 65 and 80 years per event. It has a variable rate of interest based on the risk premium and yield paid from a US money market fund.

Australian cyclone loss events will be quantified on the basis of modelled losses calculated by AIR Worldwide.

Munich Re says it’s the eighth issuance of a catastrophe bond in the Queen Street series since 2011, and the first time it has licensed a special purpose reinsurance vehicle in Ireland.

Board member Thomas Blunck says catastrophe bonds enable the reinsurer “to efficiently cover our single-peak exposures like US hurricane and Australian cyclone, and thereby improve the diversification of our overall portfolio”.