Longleaf Pine Re Ltd. (Series 2024-1)

This is the first catastrophe bond to feature the North Carolina Joint Underwriting Association as a sponsor since 2013.

The North Carolina Joint Underwriting Association (NCJUA) is also also known as the FAIR (Fair Access to Insurance Requirements) Plan. It is a tax exempt association of insurance companies that are licensed to write and engage in writing property insurance coverage in the state of North Carolina.

Longleaf Pine Re Ltd. has been established in Bermuda for this catastrophe bond issuance for the NCJUA, Artemis has learned.

Hannover Re is acting as a ceding reinsurer, to enter into a retrocessional agreement with Longleaf Pine Re and a reinsurance agreement with the NCJUA, to front the capital markets and pass on the protection.

A single tranche of Class A notes are set to be issued, to provide the NCJUA with $125 million or more in fully-collateralized catastrophe reinsurance from the capital markets.

The coverage will be for named storm losses, on an indemnity trigger and annual aggregate basis, we understand, with covered events needing to result in an ultimate net loss of at least $25 million to qualify for aggregation.

The covered area is solely the state of North Carolina.

The Class A notes would attach at $170 million of losses to the NCJUA and exhaust their coverage at $330 million, we are told.

The $125 million of Longleaf Pine Re 2024-1 cat bond notes come with an initial attachment probability of 7.72%, an initial expected loss of 5.68% and are being offered to cat bond investors with price guidance in a range from 15% to 17%, we understand.

Update 1:

We’re told the target size for this Longleaf Pine Re cat bond has been raised to up to $140 million.

At the same time the price guidance has been elevated, with a range of 17% to 17.5% now on offer, so suggesting pricing will be at the top-end of initial guidance or higher.

Update 2:

The NCJUA finally secured $145 million in named storm reinsurance with its first Longleaf Pine Re catastrophe bond.

The notes were priced at the top-end of the revised guidance, to pay investors a spread of 17.5%.

So the price rose roughly 9% from the mid-point of the initial guidance range and will now pay investors a multiple-at-market of just over 3 times the initial base expected loss.