Easton Re Ltd. (Series 2027-1)

Hamilton Insurance Group has returned to the catastrophe bond market to sponsor its third transaction, utilising its Easton Re Ltd. special purpose insurer for the second time for what looks to be a renewal and upsizing of the soon to mature Easton Re 2024-1 cat bond.

The company is again using its Bermuda based special purpose insurer (SPI) Easton Re Ltd. for what will become its third cat bond sponsorship.

Easton Re Ltd. is offering cat bond investors a single Class A tranche of Series 2027-1 notes, we are told, which are designed to provide Hamilton at least $250 million of collateralized retrocession from the capital markets.

Like previous Easton Re cat bonds, we understand that this new Easton Re 2027-1 issuance will provide the sponsor broad retrocessional reinsurance to its reinsurer Hamilton Re, the group’s Lloyd’s managing agency and so syndicate 4000, as well as its US Hamilton Select entity, Irish domiciled carrier and other entities of the group.

The currently $250 million of Easton Re 2027-1 cat bond 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 a weighted industry loss trigger and per-occurrence basis, we are told, with that protection set to run for three years from the start of 2027 to maturity in early 2030.

The notes would attach their coverage at 470m points on the industry loss index, exhausting at 850m points. While this doesn’t translate to actual industry loss quantum, it is helpful to know the width of the layer protected against, versus the retention underneath (on an industry loss index point basis).

The targeted $250 million of Series 2027-1 Class A notes that Easton Re is offering come with an initial attachment probability of 4.23%, an initial expected loss of 2.66% and are being offered to cat bond investors with spread price guidance in a range from 4.75% to 5.25%, sources explained.