CHICAGO–Aon Corp. has placed a $300 million catastrophe bond to protect Factory Mutual Insurance Co., which does business as FM Global, from earthquake exposures in the Pacific Northwest.

Aon Capital Markets, the broker’s Chicago-based investment banking unit, completed the placement of notes issued by Cascadia II Ltd., a Cayman Islands company established for the transaction.

“The deal was well-received by investors and reflects the demand for diversifying perils,” said Paul Schultz, president of Aon Capital Markets, in a statement announcing the transaction. “We have already seen record issuance of catastrophe bonds in 2006, and we expect further, significant demand throughout the remainder of 2006 and into 2007,” he said.

Oakland, Calif.-based EQECAT Inc. provided risk modeling and analysis for the transaction.