Palm Re Ltd. (Series 2024-1)

This is a debut catastrophe bond from P&C insurer Florida Peninsula Insurance Company, which is seeking a capital markets backed source of collateralized Florida named storm reinsurance to cover itself and its subsidiary Edison Insurance Company.

Palm Re Ltd. has been established in Bermuda, to issue series of catastrophe bond notes to benefit Florida Peninsula Insurance and subsidiaries.

For this first issuance, Palm Re Ltd. will seek to issue $100 million or more in Series 2024-1 Class A notes, that will be sold to investors and the proceeds of that used to fully-collateralize a reinsurance agreement with the sponsor.

The reinsurance protection will cover Florida Peninsula and Edison Insurance against named storm losses in the state of Florida, on a per-occurrence and indemnity trigger basis.

That coverage will run across a three-year term, from June 1st 2024, through May 31st 2027, we understand.

The $100 million of Palm Re Series 2024-1 Class A cat bond notes would attach their coverage at $570 million of losses and protect a share of losses up to exhaustion at $870 million, we are told.

That gives the notes an initial attachment probability of 2.5%, an initial base expected loss of 1.78% and the cat bond notes are being offered to investors with spread price guidance in a range from 10.25% to 11%, sources explained.

Update 1:

We’re told Florida Peninsula’s target for this new catastrophe bond has been lifted, with up to $150 million of Palm Re 2024-1 notes now being offered.

At the same time the price guidance has fallen, with an updated range of 9.75% to 10.25% being offered.

Update 2:

We’re now told that the target size has been fixed at $150 million for this debut cat bond for Florida Peninsula Insurance, while the price guidance for the notes has been lowered again, to a range of 9.5% to 9.75%.

Update 3:

We’re told this Palm Re 2024-1 catastrophe bond issuance will settle at the upsized $150 million, priced at 9.5%, so roughly 11% below the mid-point of initial guidance.