Ocelot Re Ltd. (Series 2025-1)

Hiscox Group has returned to the catastrophe bond market for its second takedown under the Ocelot Re Ltd. special purpose insurer (SPI).

For this Ocelot Re Ltd. (Series 2025-1) cat bond issuance, Hiscox is initially seeking $200 million of retrocessional reinsurance protection against major North American named storm and earthquake events.

Hiscox is set to use Ocelot Re Ltd., a special purpose insurer (SPI) in Bermuda, again for its latest catastrophe bond issuance.

Ocelot Re Ltd. will look to issue two tranches of of Series 2025-1 notes, that are designed to provide Hiscox with a $200 million multi-year source of US and Canada named storm and earthquake retrocession, we’ve learned from sources.

One tranche of this Ocelot Re 2025-1 catastrophe bond will be structured to provide annual aggregate and weighted PCS industry-loss trigger based coverage, while the second will provide industry-loss index trigger second and subsequent event occurrence protection, we understand.

The coverage will benefit Hiscox’s Bermuda underwriting entity and its Lloyd’s syndicates 33 and 6104, we are told, with the protection set to run across four annual risk periods, from settlement of this issue to February 2029.

We understand that there is a $10 billion per-event deductible in place for the annual aggregate tranche of notes, meaning a named storm or earthquake won’t qualify to erode the attachment under these cat bond notes until the reported industry-loss is above that level.

A $150 million tranche of Class A notes will provide the annual aggregate protection and have an initial attachment probability of 1.73%, an initial expected loss of 1.35% and are being offered to investors with price guidance for a spread of between 4.25% and 4.75%, we’re told.

A $50 million tranche of Class B notes will provide second and subsequent event occurrence based protection and have an initial attachment probability of 2.55%, an initial expected loss of 1.89% and are being offered to investors with price guidance for a spread of between 6.5% and 7.25%, sources said.

Update 1:

We’re told the price guidance has dropped for both tranches of notes on offer, but the size of this Ocelot Re 2025-1 catastrophe bond remains at $200 million for sponsor Hiscox.

The $150 million tranche of Class A notes now have price guidance at the bottom of the initial, in a new tighter range of 4.25% to 4.5%.

The $50 million tranche of Class B notes now have price guidance below the initial, also in a tighter range of 6.25% to 6.5%.

Update 2:

Hiscox has now successfully secured the targeted $200 million of multi-peril and multi-year retrocessional reinsurance capacity from the capital markets with this new Ocelot Re 2025-1 catastrophe bond now priced.

The $150 million tranche of Class A notes priced for a spread of 4.5%, so the mid of the initial range.

The $50 million tranche of Class B notes priced for a spread of 6.25%, so below the initial guidance range.