Allied World Assurance Company (AWAC) has successfully priced its latest catastrophe bond, securing its increased target of $275 million in reinsurance protection. 2001 CAT Re Ltd. (Series 2023-1) renewal transaction, while the spread was valued at approximately 14% below the midpoint of initial forecasts.
Allied World returned to the cat bond market earlier this monthseeking coverage of $250 million through this new issue, which will contribute to some extent to the renewal of its soon-to-maturity issue in November 2020, an issue of $210 million 2001 CAT Re 2020-1 agreement.
Allied World the appetite has increased, with this updated cat bond offering to launch the issuance to provide the company with $275 million in retrocessional reinsurance coverage backed by capital markets, while at the same time lowering price guidance.
Today we are told that the CAT Re 2023-1 catalytic bond issue of 2001 has been evaluated and that Allied World has achieved the raised target of $275 million, while at the same time, the The gap was set at the bottom of the already reduced price forecasts.
Which means that the ad hoc insurer 2001 CAT Re Ltd. will issue a single $275 million tranche of Series 2023-1 Class A Notes.
The Notes will provide Allied World and its subsidiaries with fully guaranteed reinsurance protection against certain losses due to designated storms in the United States, earthquakes in the United States and Canada and windstorm risks in Europe, over a loss trigger basis in the sector and by event over three annual risk periods starting in January. 1, 2024.
The now-confirmed $275 million Series 2023-1 Class A Notes, to be issued by 2001 CAT Re Ltd., have an initial expected loss of 5.13%.
The bonds were first offered to catalytic bond investors with spread price forecasts of between 14% and 15%, but we later learned that this range had been lowered and a wider range had been given, with the updated forecast forecasting a spread of 12.5%. at 14%.
Now, we’ve been told that the spread has been fixed and ticket prices are set at 12.5%, which represents a price drop of about 14% from the midpoint of the original forecast, a good result for Allied World.
Allied World clearly worked with its partners to maximize the efficiency of this cat bond issue, ultimately achieving much better execution than expected, with a price apparently perhaps larger than the size of the cat bond, given the upside relatively weak.