Aspen’s new Kendall Re 2018 cat bond set to upsize 50% to $225m

The first catastrophe bond in over a decade from Bermudian insurance and reinsurance group Aspen Insurance Holdings Limited looks set to increase in size by 50%, with the Kendall Re Ltd. (Series 2018-1) international multi-peril transaction now likely to secure the company $225 million of collateralized reinsurance protection.

At launch, the Kendall Re Ltd. catastrophe bond issue was offering investors $150 million of notes, through a single Class A tranche of notes that are to be sold to investors and the proceeds used to collateralize multi-peril reinsurance agreements between the issuance vehicle and Aspen.

Now the offering has increased in size, we’re told, with Bermudian SPI Kendall Re Ltd. now targeting an issuance and sale of $225 million of notes to support the underlying fully-collateralized reinsurance arrangement.

The Kendall Re 2018-1 cat bond will provide Aspen Bermuda with fully-collateralized retrocessional reinsurance protection from certain losses caused by a range of international perils, including; U.S. named storm risks including Puerto Rico and the U.S. Virgin Islands, U.S. & Canada earthquake risks, U.S. severe thunderstorms, U.S. wildfires, U.S. winter storms, and European windstorms.

Aspen will receive reinsurance coverage across a three-year term from Kendall Re Ltd., on an annual aggregate and industry loss basis and featuring weighted industry loss index triggers from PCS and PERILS.

The issuance originally featured $150 million of Kendall Re 2018-1 notes, with an initial expected loss of 2.4%, that were being offered to cat bond investors with coupon price guidance in a range from 5.5% to 6%.

Now the offering size has increased to $225 million of notes, we understand, while the pricing looks set to tumble, with the latest guidance being 5.25% to 5.5%.

So the Kendall Re 2018-1 catastrophe bond looks like to be a success for Aspen, marking an effective return to the ILS market after over a decade away from cat bond sponsorship.

We’ll continue to update you as Aspen’s Kendall Re Ltd. (Series 2018-1) catastrophe bond comes to market and you can read about this and every other deal since the inception of the cat bond market in the Artemis Deal Directory.

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