Fish Pond Re Ltd. (Series 2024-1)

This is the first catastrophe bond to be sponsored by Texas Farm Bureau Insurance, the insurer arm of Texas’s largest farm organisation, a non-profit focused on its members from the agricultural community.

For its first cat bond, Texas Farm Bureau Insurance has established a Bermuda based issuer, named Fish Pond Re Ltd.

Fish Pond Re Ltd. will look to issue a single Class A tranche of Series 2024-1 catastrophe bond notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the vehicle and the Texas Farm Bureau Insurance subsidiaries.

We’re told the covered entities include Texas Farm Bureau Casualty Insurance Company, as well as mutual insurer subsidiaries of the Texas Farm Bureau.

The Class A notes are targeted to provide $200 million in named storm reinsurance protection for the state of Texas, on an indemnity trigger and per-occurrence basis, over a three year term to the end of 2026.

We understand the attachment point for the coverage will be at $1.25 billion of losses, giving the notes an initial attachment probability of 0.176%, an initial expected loss of 0.112% and spread price guidance in a range from 4% to 4.5%.

Update 1:

Texas Farm Bureau Insurance looks set for strong execution of its debut catastrophe bond, as the insurer is now targeting an upsized between $225 million and $255 million of named storm reinsurance from this Fish Pond Re 2024-1 cat bond issuance.

At the same time, we’re told the price guidance has been lowered to between 4% and 4.25%, suggesting the notes will price at the mid-point of guidance or lower.

Update 2:

We understand that Texas Farm Bureau secured the upsized target for $255 million of reinsurance from its debut Fish Pond Re catastrophe bond deal.

At the same time, the notes have been priced to pay investors a spread of 4%, which is the bottom-end of initial price guidance.