Easton Re Ltd. (Series 2024-1)

This is the second catastrophe bond to be sponsored by Hamilton Insurance Group and marks the company returning for a renewal of its soon to mature Easton Re 2020 cat bond.

For its second cat bond, Hamilton has shifted domicile to Bermuda, having sponsored its debut cat bond out of Singapore.

Easton Re Ltd. has been registered in Bermuda as a company for issuance of catastrophe bond notes for Hamilton.

We understand that this new Easton Re 2024-1 cat bond will provide broad retrocessional reinsurance to Hamilton Re, the group’s Lloyd’s managing agency and so syndicate 4000, as well as its Irish domiciled carrier and other entities of the group.

The target is to secure at least $150 million of collateralized retrocession from the capital markets, through Easton Re’s issuance of a single tranche of Series 2024-1 Class A notes.

The notes will be exposed to losses from U.S., DC, Puerto Rico, and Virgin Islands named storms, as well as U.S. and Canada earthquakes, on an industry loss trigger and per-occurrence basis, we understand.

The only significant change to the coverage offered in this renewal, is the addition of Canadian quake as a covered peril, it seems.

The retro reinsurance coverage that the Easton Re 2024-1 notes provide will run across a three year term, through calendar years 2024 to 2026, with maturity slated for early January 2027, our sources said.

The targeted $150 million of Class A notes come with an initial attachment probability of 4.12%, an initial expected loss of 2.65% and are being offered to cat bond investors with spread price guidance in a range from 8% to 8.75%, we are told.

Update 1:

The targeted size of the issuance was raised to $200 million, while the spread price guidance was lowered to a range of 7.5% to 8%.

Update 2:

Hamilton eventually secured the upsized $200 million of retrocessional reinsurance protection with this Easton Re Ltd. 2023-1 catastrophe bond.

The notes were eventually priced to pay investors a spread of 7.5%, so the bottom end of reduced guidance and around 11% below the initial guidance mid-point.