Queen Street 2023 Re dac

This is the first catastrophe bond sponsored by Munich Re that we have listed in our Deal Directory since 2016 and the 22nd Munich Re sponsored cat bond we’ve tracked since 2001.

For this new cat bond, Munich Re has established a new Ireland based designated activity company named Queen Street 2023 Re dac.

As we understand it, Queen Street 2023 Re dac will issue a single tranche of notes that will be sold to cat bond funds or investors and the proceeds used to collateralize a retrocessional reinsurance arrangement between it and the sponsor.

We’re told that this Queen Street 2023 Re catastrophe bond will provide Munich Re with a capital markets backed source of US named storm retro reinsurance protection, covering it for three wind seasons and with its maturity slated for the start of December 2025.

The retro protection from these notes will be afforded on a per-occurrence basis, structured to use a PCS state-weighted industry-loss trigger, we understand.

According to sources, the targeted issuance size is currently $100 million, although it’s likely this could grow if pricing is conducive.

The Queen Street 2023 Re dac notes will have an initial attachment probability of 2.26%, an initial base expected loss of 1.72% and are being offered to cat bond investors with price guidance in a range from 8% to 8.75%, it’s said.

Update 1:

We’re told the target size for this new Queen Street 2023 Re catastrophe bond for Munich Re has been doubled to $200 million.

At the same time, the price guidance for the notes has been lowered to the bottom of initial guidance, at 8%.

Update 2:

We understand that the size guidance has been increased again, with now up to $300 million in retrocession being sought from this new Queen Street 2023 cat bond by Munich Re.

The price guidance has also been further reduced, with a range of 7.5% to 8% now offered.

Update 3:

We understand the Queen Street 2023 Re dac notes were finalised at the upper size guidance of $300 million, so a tripling of the initial target, while their spread was priced at 7.5%, so below the initial range and an almost 11% discount from the initial mid-point of guidance.