PoleStar Re Ltd. (Series 2024-2)

This is Beazley’s second 144A cyber catastrophe bond under PoleStar Re Ltd., as the company expands its cyber cat bond backed reinsurance by $160 million taking it to $300 million across the two deals sponsored so far.

We understand this second PoleStar Re cyber catastrophe bond issuance is being seen as an extension of the first $140 million PoleStar Re 2024-1 that was sponsored by Beazley last December.

We understand from sources that the structure is the same and this new cyber cat bond could perhaps simply fill out the $300 million layer that the first PoleStar Re deal partially filled.

That PoleStar Re 2024-1 cyber cat bond has an attachment point at $500 million of losses and exhausts its coverage at $800 million, so it is possible this new $160 million issuance, which we’re terming a Series 2024-2 deal (although that is not yet confirmed to us) may just expand the coverage to the full layer.

We’re told that very strong investor demand for the initial notes attracted Beazley to extend the PoleStar Re cyber cat bond cover and this is evidenced in the way the issuance has eclipsed the first, providing the full-layer of reinsurance coverage (if it does, as assumed, occupy the same layer of the tower).

As with the first, we assume this new Pole Star Re issuance will provide Beazley a $160 million source of broad cyber reinsurance coverage from the capital markets, protecting it against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

The same Bermuda domiciled special purpose insurer PoleStar Re Ltd. has been used for this second 144A cyber cat bond from Beazley.

We understand the notes are again structured on an indemnity trigger and per-occurrence basis, but this time will run across a longer term through the rest of 2024, and all of calendar year’s 2025 and 2026.

Sources said that broker Gallagher Securities is again the sole structuring agent and bookrunner for Beazley’s second 144A cyber cat bond. We also suspect the risk modeller will be the same, which was RMS for the first PoleStar cyber cat bond.

We are told the notes are expected to pay investors a spread of 13.25%, which is slightly higher than the 13% of the first PoleStar Re cat bond. The initial expected loss is the same at 1.26%.

Now, with this second issuance Beazley is the sponsor of $300 million of 144A cyber catastrophe bond notes, across the two take-downs from PoleStar Re Ltd.