PoleStar Re Ltd. (Series 2024-1)

The first full 144a cyber catastrophe bond from London headquartered specialty re/insurer Beazley is now in the market, we’re told, with the company seeking $75 million or more in cyber reinsurance from the capital markets through this PoleStar Re 2024-1 cyber cat bond.

PoleStar Re Ltd. has been established in Bermuda for the issuance of catastrophe bond notes for Beazley, we understand, with a single tranche of Series 2024-1 notes on offer this time.

It’s notable that this is Beazley’s first ever full 144a cat bond, as previously it had never sponsored a catastrophe risk exposed 144a ILS deal.

We’re told that the $75 million or more in notes to be issued by PoleStar Re will provide Beazley with broad reinsurance coverage against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

This cyber reinsurance coverage will be on an indemnity trigger and per-occurrence basis, across a two year term through calendar year’s 2024 and 2025.

The $75 million of PoleStar Re Series 2024-1 Class A notes would attach their coverage at $500 million of losses to Beazley from a cyber event, we understand, covering a share of losses to $800 million.

Sources said that gives the notes an initial attachment probability of 1.71% and an initial expected loss of 1.26%.

We’re told that these cyber cat bond notes are being marketed to cat bond funds and investors with spread price guidance in a range from 12% to 13%.

Update 1:

We’ve learned that Beazley is now targeting $130 million of cyber reinsurance from its debut 144A cyber cat bond PoleStar Re 2024-1, which would represent a 73% upsizing of the notes offered.

At the same time, the price guidance has been elevated to the top-end of the initial range, at 13%.

Update 2:

We are told that Beazley’s target size for this PoleStar Re cyber cat bond has increased again to $140m, while the spread guidance for the notes remains at 13%.

Update 3:

We now understand that Beazley’s debut cyber catastrophe bond and its first 144A cat bond ever, has been successfully priced to provide the twice-upsized target of $140 million of reinsurance protection, while the notes spread was finalised at 13%, the top-end of guidance.