Purple Re Ltd. (Series 2025-1)

This is set to be the fourth catastrophe bond in the Purple Re Ltd. series, sponsored by full-stack homeowners property insurtech writer Slide Insurance Company, as it deepens the participation of capital markets and insurance-linked securities (ILS) investors in its named storm and hurricane reinsurance arrangements.

With an initial target to secure $250 million of collateralized reinsurance through this Purple Re 2025-1 catastrophe bond, this is likely to become the largest in the series for Slide Insurance Company.

With this latest cat bond for Slide, the company is again using its Bermuda based special purpose insurer (SPI) Purple Re Ltd.

Purple Re Ltd. will issue two tranches of Series 2025-1 notes that will be offered and sold to cat bond funds and investors, with the proceeds raised set to fully-collateralize reinsurance agreements between the issuer and Slide.

We understand the reinsurance protection from this new Purple Re 2025-1 cat bond will benefit both Slide Insurance Company and its Pawtucket Insurance Company subsidiary.

The $250 million of Series 2025-1 notes on offer will provide Slide with fully-collateralized named storm reinsurance on an indemnity and per-occurrence basis, across the states of Florida and South Carolina to begin.

The term of coverage will run three annual risk periods from June 1st, so with maturity scheduled for early June 2028, we are told.

We’re told the two tranches of notes on offer will occupy a share of the upper-layers of Slide’s reinsurance tower, sitting on top of one another and alongside traditional reinsurance in each case.

Purple Re will issue a currently $125 million Series 2025-1 Class A tranche of notes, that have an initial attachment point of $100 million and cover a share of losses to $357 million. But we’re told that after FHCF cover and stated reinsurance the effective attachment for the Class A notes is at $2.23 billion of losses for a first-event.

The Class A notes have an initial attachment probability of 1.16%, an initial base expected loss of 1.05% and are being offered to cat bond investors with price guidance in a range from 7% to 7.75%, sources said.

Purple Re is also set to issue a currently $125 million tranche of Class B Series 2025-1 notes, that have an initial attachment point of $100 million and cover a share of losses to $350 million. But here we’re told that after the FHCF cover and stated reinsurance is taken into account, the effective attachment for the Class B notes is at $1.98 billion of losses for a first-event and they sit in a reinsurance tower layer directly beneath the Class A notes.

We’re told that the Class B notes come with an initial attachment probability of 1.56%, an initial base expected loss of 1.33% and are being offered to cat bond investors with price guidance in a range from 7.5% to 8.25%.

These two tranches of Series 2025-1 cat bond notes, in sitting at the top of Slide’s reinsurance tower, are remote in risk terms and their respective attachment points are well above the levels of ultimate loss the insurer has faced from major hurricanes in recent years.

Update 1:

We are told by sources that some of the risk metrics associated with this new Purple Re 2025-1 catastrophe bond have been updated.

The attachment and exhaustion points have been updated, we believe to more clearly factor in stated reinsurance and FHCF benefits, resulting in small adjustments to the expected loss metrics.

The Class A notes now have an attachment point at $607 million of losses, with exhaustion at $864 million, giving them an initial expected loss of 1.04%.

The Class B notes now have an attachment point at $604 million of losses, with exhaustion at $857 million, giving them an initial expected loss of 1.24%.

We’re also told that the proposed settlement date has now been moved into May, having previously been April.

Update 2:

Slide remains on-target to secure its largest cat bond yet, with still $250 million of reinsurance sought from this Purple Re 2025-1 deal.

The still $125 million Series 2025-1 Class A tranche of notes have seen their pricing updated to guidance for a spread of 7.25%, we are told.

The still also $125 million tranche of Class B Series 2025-1 notes have seen their pricing updated to guidance for a spread of 7.75%.

Update 3:

Slide secured the targeted $250 million of reinsurance from this Purple Re 2025-1 deal, making it the largest cat bond yet for the insurer.

The $125 million Series 2025-1 Class A tranche of notes priced for a spread of 7.25%, we are told.

The $125 million tranche of Class B Series 2025-1 notes priced for a spread of 7.75%.