Everglades Re II Ltd. (Series 2018-1)

Florida Citizens returns with another catastrophe bond in the Everglades Re series of transactions. This Everglades Re II 2018-1 cat bond targets $200m or greater of Florida named storm reinsurance protection.

This Everglades Re II transaction will offer a single $200 million Series 2018-1 tranche of Class A notes to ILS investors, we understand, with exposure linked to Florida named storm risks across a three-year term.

The notes will provide Florida Citizens with a fully collateralized source of annual aggregate reinsurance protection against losses from Florida named storms (so the impacts of tropical storms and hurricanes), with the cat bond featuring an indemnity trigger.

Subject business is all from the Citizens coastal account, and consists of both personal and commercial residential property exposures.

The Evergaldes Re II 2018-1 notes will attach at $1.735 billion and cover a percentage of losses up to $2.615 billion, which leaves plenty of room for the transaction to upsize, should Florida Citizens choose to.

The resulting initial attachment probability is 2.56% at the base cases and the expected loss 1.93% for the Everglades Re II 2018-1 notes. The currently $200 million of notes are being offered to investors with coupon price guidance in a range of 4.75% to 5.25%.

Update 1:

The price guidance has tightened towards the lower-end of the initial range, with the notes now marketed at 4.75% to 5%.

Update 2:

Florida Citizens opted to upsize this Everglades Re II 2018-1 catastrophe bond to $250 million at pricing.

The pricing for the $250 million of Class A notes was eventually fixed at the low-end of guidance, at 4.75%.