(Bloomberg) -- For the first time, a cyber-catastrophe bond has made its way into public debt markets.

Long Walk Reinsurance Ltd. issued a $75 million so-called cat bond, sponsored by Axis Capital, to insure against “a cyber-catastrophe event” across its main underwriting units, the Bermuda-based firm said Tuesday. The deal was oversubscribed, which “allowed us to tighten pricing,” said Peter Vogt, Axis Capital’s chief financial officer.

“We expect this transaction will serve as a template that the catastrophe bond market will use to support the availability of cyber insurance capacity in the years to come,” Vogt said in an interview.

The bond protects Axis and its subsidiaries against systemic cyber shocks over a two-year period, starting in January. In return for taking on that risk, investors in the bond stand to get an annual return of 9.75% above a US Treasury money market fund in which the collateral is invested.

The Long Walk 144A cyber-cat bond transaction was structured and distributed to investors by Aon Securities and involved risk-analysis modeling provided by CyberCube. 

Read More: Cyber ‘Catastrophe Bonds’ Set to Test Public Debt Markets 

Insurers have typically used catastrophe bonds to shield themselves from losses tied to extreme-weather events such as hurricanes or earthquakes. But as cyberattacks become more frequent and destructive, companies have started looking to cat bonds as a way to protect against increasingly uninsurable risks.

Read More: ICBC Hit by Cyberattack, Tells US Clients to Reroute Trades 

In exchange for above-average returns, investors agree to take on significant risks, including the possibility that they can lose the money they put into the bond. They also have limited data around which to model loss probabilities. For that reason, cyber cat bonds have so far been limited to private debt markets, in which investors have more control over the terms.

The Long Walk cat bond will test demand for such products beyond the private markets. UK-based insurer Beazley Plc, which privately placed three cyber cat bonds this year, also is exploring moving into public markets, according to Artemis, a research firm specializing in insurance-linked securities. 

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(Adds reference to cyberattack on Okta.)

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