Leading US insurer Safepoint Insurance Company has priced its latest catastrophe bond issue, with the Nature Coast Re Ltd. (Series 2023-1) the issuance is now set to provide the company with $195 million in storm reinsurance protection.
Safepoint returned to the catastrophe bond market in Octoberwith a goal of securing at least $150 million in reinsurance protection from the capital markets, to protect it against losses from named storms affecting Florida and Louisiana and also covering its Cajun reciprocal exchange entity.
As we then reported, the Nature Coast Re catalytic bond issue was expected to increase, while its price increased, and could have reached an amount ranging from $165 million to $225 million, over the two tranches of notes issued.
Today, we’re told the deal plans to provide Safepoint with $195 million in storm and hurricane reinsurance, while the price of each tranche of tickets remains at high levels.
The Nature Coast Re 2023-1 catastrophe bond issuance, now $195 million, will protect both Safepoint Insurance Company and its exclusively Louisiana-focused entity, Cajun Underwriters Reciprocal Exchange, providing reinsurance protection against losses related to storms in the states of Florida and Louisiana for each event and basis for triggering compensation, over a period of three years until November 30, 2026.
Originally, the two proposed tranches of notes were expected to be worth $75 million.
The tranche of Class A notes, which is the low risk layer with an expected initial loss of 0.93%, was then pitched to investors at between $125 million and $150 million and we are now told that this high end target was reached. , the amount will therefore be $150 million.
Class A bonds had an initial spread of 9-10%, which has now been set at the upper limit of 10%, we are told.
Class B bonds, which are riskier with an expected initial loss of 1.60%, have had their target size adjusted and lowered to between $40 million and their original size of $75 million, but we are now told that They will amount to $45 million for Safepoint. .
Class B bonds initially had a spread of 11.5% to 12.5%, but the spread has now been set at the high level of 13.5% for this riskier tranche, sources said.
It is good to see Safepoint getting more than the reinsurance originally planned and the fact that the low risk note layer has increased reflects the appetite of catalytic bond investors to effectively fill more of the upper layers of reinsurance towers for US insurers exposed to disasters.
It is now Safepoint’s sixth catastrophe bond which we have listed in our transaction directory.
You can read everything about this news Nature Coast Re Ltd. (Series 2023-1) Safepoint catastrophe bond as well as details of every other catastrophe bond ever issued in the vast Directory of Artemis offers.