Swiss Re Insurance-Linked Fund Management

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Bonanza Re Ltd. (Series 2022-1)

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Bonanza Re Ltd. (Series 2022-1) – At a glance:

  • Issuer: Bonanza Re Ltd.
  • Cedent / sponsor: American Strategic Insurance Group
  • Placement / structuring agent/s: Gallagher Securities is sole structuring agent & bookrunner
  • Risk modelling / calculation agents etc: AIR Worldwide
  • Risks / perils covered: US named storm
  • Size: $135m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Mar 2022

Bonanza Re Ltd. (Series 2022-1) – Full details:

This is the sixth catastrophe bond that will benefit American Strategic Insurance Group and its insurer entities and the fifth in the Bonanza Re Ltd. series of deals.

Sources have told us that Bonanza Re Ltd., the sponsors Bermuda domiciled special purpose insurer (SPI), will look to issue a single tranche of Series 2022-1 Class A notes for its latest cat bond.

The target size for the Class A notes is said to be $135 million, although this will span a larger layer of the ARX Holding reinsurance tower, so there is room for the issuance to upsize.

The Bonanza Re 2022-1 catastrophe bond is designed to provide American Strategic insurance entities with a source of multi-year collateralized reinsurance from the capital markets, to protect the company against US named storm loss events over a three year term, running to March 2025, we understand.

The protection will be afforded on an indemnity trigger and per-occurrence basis.

The $135 million or more of Class A notes that Bonanza Re is offering will cover losses from an attachment point of $1 billion up to exhaustion at $1.4 billion, giving them an initial expected loss of 2.03%, we’re told.

The notes are being offered to investors with coupon price guidance in a range from 5.25% to 5.75%.

Update 1:

The Bonanza Re 2022-1 catastrophe bond did not upsize for ARX Holding, remaining at $135 million.

The notes priced at the upper-end of guidance, for a 5.75% coupon.

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