The targeted issuance size for the Massachusetts Property Insurance Underwriting Association (MPIUA) latest catastrophe bond Cranberry Re Ltd. (Series 2017-1) has risen again to $350 million, while at the same time the price guidance has dropped to the bottom of the originally marketed range.
The MPIUA is a wind pool property insurance group for those unable to access traditional markets in the state of Massachusetts and has previously accessed the catastrophe bond market with its 2010 transaction Shore Re Ltd. that matured in 2013 and the Cranberry Re Ltd. (Series 2015-1) that matures June 2018.
This new Cranberry Re 2017-1 cat bond expands the coverage from the 2015 deal, seeking a similarly fully-collateralized source of reinsurance protection for losses from State of Massachusetts named storms (so tropical storm and hurricane risks), severe thunderstorms and winter storms.
The deal launched targeting $250 million of reinsurance protection for the MPIUA, a target that was then lifted to up to $300 million of cover.
Now, at the latest update, the Cranberry Re 2017-1 cat bond issuance looks likely to achieve a size of $350 million, with the resulting reinsurance protection priced very competitively for the MPIUA, we’re told.
The initial price guidance for this cat bond was 2% to 2.5%. That was narrowed towards the lower end of that range, at 2% to 2.25%, earlier this week. But the pricing is now fixed at the bottom of guidance at just 2%, making this a very efficiently priced layer of reinsurance protection, should nothing change by final pricing.
Pricing is now set for Monday, we understand from sources, while issuance and completion is now set for the 12th June.
Join Artemis in Singapore on July 13th 2017 for ILS Asia, tickets on sale here
Subscribe for free and receive weekly Artemis email updates
Sign up for our regular free email newsletter and ensure you never miss any of the news from Artemis.