Meadows Ltd. (Series 2025-1)

This new Meadows Ltd. Series 2025-1 catastrophe bond is coming to market via a cedent named OIS Series 2 LLC, which is a wholly owned subsidiary of New York headquartered alternative asset manager and registered investment adviser One William Street Capital Management, L.P.

One William Street Capital Management has around US $8 billion in assets under management and is known to invest in the insurance-linked securities (ILS) asset class, to a range of structures from reinsurance, through sidecars, and cat bonds.

The ceding entity, OIS Series 2 LLC is a fund structure that holds ILS investments for One William Street Capital, we believe, so it seems this cat bond is being issued to source reinsurance or risk transfer capital to provide a hedge for its own insurance-linked securities book.

Meadows Ltd. is a newly registered Bermuda based company that is expected to be licensed as a special purpose insurer (SPI) and be used for issuing catastrophe bonds, we are told.

For this first issuance, Meadows Ltd. is looking to issue three tranches of Series 2025-1 cat bond notes, that will be sold to investors and the proceeds used to collateralize underlying reinsurance agreements between the structure and the ceding company.

We’re told the ceding company is OIS Series 2 LLC, which appears to be a Cayman Islands based private fund managed by One Willis Street Capital and is a wholly owned subsidiary of the company.

At launch to investors, we’re told $125 million or more is the target size for the Meadows Ltd. cat bond, with the reinsurance that provides set to be structured on an industry-loss trigger basis.

Both occurrence and annual aggregate protection are being sought, while the covered peril will be US named storms, although with some differences to covered areas for each of the three tranches of notes on offer. The protection will run through till the end of November 2029, so cover four full hurricane seasons.

The Class A notes are currently targeted at $50 million in size and will provide industry-loss trigger per-occurrence protection against losses from named storms in Florida, Puerto Rico and the US Virgin Islands, we understand.

The Class A notes will come with an initial attachment probability of 7.78%, an initial base expected loss of 6.96% and are being offered to cat bond investors with price guidance in a range from 13.5% to 14.5%.

The Class B notes are also targeted at $50 million in size and will provide industry-loss trigger per-occurrence protection against losses from named storms across the United States 50 states and D.C. but excluding Florida, we are told.

The Class B notes will come with an initial attachment probability of 8.42%, an initial base expected loss of 7.77% and are being offered to cat bond investors with price guidance in a range from 12.5% to 13.5%.

The Class C notes are targeted at $25 million in size and will provide industry-loss trigger annual aggregate protection against losses from named storms across the US states of Florida, Georgia, North and South Carolina, Puerto Rico and the US Virgin Islands, sources said.

For these aggregate Class C notes, we’re told there is a franchise deductible of 15 billion index points per-event, while the attachment is said to be at 30 billion but also with a per-event cap of the same, which effectively makes this an aggregate cat bond tranche that would require two qualifying events to attach, it seems.

The Class C notes will come with an initial attachment probability of 2.22%, an initial base expected loss of 2.14% and are being offered to cat bond investors with price guidance in a range from 8.75% to 9.75%.

Update 1:

We understand that One William Street Capital is now targeting up to $135 million of retrocessional reinsurance from its debut Meadows Ltd. catastrophe bond.

The price guidance has also fallen for all three tranches of notes, as lower spreads are now targeted for the issuance.

The Class A notes are now targeted to be between $50 million and $55 million in size, while their price guidance has fallen to a range of 12.75% to 13.5%.

The Class B notes are still targeted at $50 million in size, while their price guidance has fallen to a range of 12% to 12.5%.

The Class C notes are now targeted to be between $25 million and $30 million in size, while their price guidance has fallen to a range of 8% to 8.75%.

Update 2:

We’re told the target size remains at $135 million for this debut Meadows Ltd. catastrophe bond for One William Street Capital Management, but the price guidance has been lowered for a second time.

The Class A notes are still at their slightly upsized $55 million, but their price guidance has been revised a second time to a range of 12.25% to 12.75%.

The Class B notes remain at their initial $50 million size but their guidance has been revised down again to between 11.5% and 12%.

The Class C notes also remain at a slightly upsized $30 million, with their guidance now lowered a second time to between 7.5% and 8%, we understand.

Update 3:

We’re told that One William Street Capital has now secured the slightly upsized target of $135 million of reinsurance from its debut Meadows Ltd. catastrophe bond.

All three tranches of notes were priced at their lowest-ends of twice reduced guidance.

The Class A notes are $55 million in size and priced to pay investors a spread of 12.25%.

The Class B are $50 million in size and priced to pay a spread of 11.5%.

The Class C notes are $30 million in size and priced to pay investors a spread of 7.5%.