NN Group, or Nationale-Nederlanden, has finalized its new Orange Capital Re DAC (Series 2023-1) a catastrophe bond with a size of €75 million, while the bonds were priced at the upper end of the initial spread range.
NN Group return to the cat bond market at the end of Octoberseeking €75 million or more of guaranteed reinsurance in capital markets to cover losses from European natural perils.
This is the insurer’s second cat bond, with NN Group first entering the catastrophe bond market in 2021, securing €75 million in guaranteed European reinsurance against windstorms and severe thunderstorms with a first launch. Orange Capital Re DAC 2021-1 emission.
With this second cat bond of Orange Capital Re 2023-1, NN Group seeks to obtain 75 million euros or more in catastrophe reinsurance to cover the risks of windstorms and severe thunderstorms in Belgium and the Netherlands only , on a compensation basis and per event over a period of three years. mandate, from the beginning of 2024 to the end of 2026.
This emission has not increased, but as we reported earlier the spread guidance was adjusted during the marketing of the Orange Capital Re cat bond.
The remaining €75 million tranche of Series 2023-1 Class A notes, which have an expected initial loss of 3.42%, was initially offered to catalytic bond investors with spread price forecasts included between 6.75% and 7.5%.
As we said, this forecast was then adjusted and reduced to a range of 7.25% to 7.5%, so towards the high end.
However, we were told that the Orange Capital Re DAC 2023-1 cat bonds had been valued at the high end of the range, to offer investors a spread of 7.5%.
Thus, NN Group succeeded in guaranteeing its objective of 75 million euros of catastrophe reinsurance in Europe for two of its most important risks.
As we have explained, this agreement provides an important indication of how European catastrophe reinsurance renewals could play out at the end of the year. A number of catastrophe bonds and ILS transactions have now been priced above the original midpoint of forecasts to cover property catastrophe risks in Europe in recent weeks and, while others are still being marketed, it will be interesting to see what other price indications can be obtained from the chat. bond market as the renewal approaches.