Safepoint’s Manatee 2016-1 Class C cat bond notes priced for total loss

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The $20 million Class C tranche of notes from Safepoint Insurance Company’s Manatee Re Ltd. (Series 2016-1) catastrophe bond have been priced for a total loss by the leading cat bond trading desks, confirming our article from Friday on the first cat bond loss from hurricane Irma.

Some broker pricing sheets have the Manatee Re 2016-1 Class C tranche of notes priced down for bids of zero, reflecting the filing of an event notice at the end of last week that revealed Safepoint’s losses from hurricane Irma are high enough such that the cat bond will be triggered and the insurer should be able to collect on the $20 million layer of reinsurance provided by the Class C notes.

Safepoint’s losses from hurricane Irma have been sufficiently large that the insurer is eating into its reinsurance provisions, including this Class C of the Manatee Re 2016 cat bond.

The Manatee Re notes sit at the lower end of Safepoint’s reinsurance tower, we understand, and the current estimate of losses suggests that the $20m layer provided by the notes are a total loss.

Above the notes sit Safepoint’s FHCF layer, with private reinsurance next to it and we understand that the insurers losses from hurricane Irma are also expected to eat into that layer of protection as well.

The Manatee Re 2016-1 Class C notes are the first catastrophe bond to be hit by hurricane Irma’s impacts on Florida, but unlikely to be the last.

A number of aggregate retrocession cat bonds, which are all based on industry loss triggers, are deemed at risk of the combined totals from both hurricane Harvey and Irma. Some Florida primary insurer sponsored per-occurrence bonds are also being closely watched.

Additionally, we understand some private cat bond layers are at risk in Florida from hurricane Irma losses as well.

You can read all about the Manatee Re Ltd. (Series 2016-1) catastrophe bond and every other transaction in the Artemis Deal Directory.

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