After the exceptional summer of 2003 Corney and Barrow was keen to secure protection against the possibility of the reverse experience this year. The transaction is based on a critical number of "hot" days (as measured by daily maximum temperature) and will pay Corney & Barrow for each day that the total number of such hot days falls below the defined critical level. This provides Corney and Barrow with financial protection in the event of a poor summer.
Paul Masters, Group Commercial Director at Corney & Barrow said: "Based on the advice and analysis we were provided with by Speedwell, we are delighted to have been able to execute this hedge with XL Trading Partners Ltd. With the same attention to detail that drives success in our bars, we have secured a tailored, financial product capable of managing the risk that abnormal weather may bring to our business."
Dan Tomlinson, for XL Trading Partners Ltd said: "With this transaction Corney and Barrow have demonstrated how companies can use weather derivatives to remove some of the business uncertainty caused by unpredictable weather. This clearly leaves them free to concentrate on their core business operations. We are particularly encouraged to see them return to the market as this provides continued evidence that weather derivatives can be a valuable risk management tool for weather sensitive operations."
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About Weather Risk Management Products
Weather risk management products are designed to help companies mitigate the effects on production or sales volumes caused by variations in normal weather conditions. Weather events covered include those relating to temperature, rainfall and snowfall. Businesses which can be exposed to weather risk include those in the agriculture, construction, energy, entertainment, manufacturing, retail, travel and tourism sectors.
About XL Trading Partners Ltd
XL Trading Partners Ltd provides innovative risk management products that allow businesses to mitigate their non- catastrophic weather and contingent energy risk. XL Trading Partners Ltd is an indirect, wholly owned subsidiary of XL Capital Ltd, which through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial clients on a worldwide basis. As of March 31, 2004, XL Capital Ltd had consolidated assets of approximately $44 billion and consolidated shareholders' equity of approximately $7.4 billion. More information about XL Capital Ltd is available at www.xlgroup.com.
About Corney and Barrow Wine Bars Limited
With 11 sites located within the heart of London's financial district, Corney & Barrow is the wine bar operator of choice for City professionals - with a reputation built on service excellence and an unrivalled food and drinks offering.
About Speedwell Weather Derivatives (SWD)
Founded in 1999 Speedwell Weather Derivatives provides software and consultancy to the weather derivative market. SWD are regulated by the FSA and have clients and data provider partners in the banking, energy, broking and insurance sectors in Europe, North America, Africa and the Asia Pacific region. For more information please see www.weatherderivs.com
To contact Speedwell Weather Derivatives:
Tel: +44 (0) 20 7929 7979