Recoletos Re DAC (Series 2025-1)

This is the second catastrophe bond sponsorship by Spanish headquartered global reinsurance company Mapfre Re, as the company looks to secure capital markets backed European windstorm protection to complement its traditional retrocession program.

Mapfre Re is again using its Ireland based issuance vehicle Recoletos Re DAC for its second catastrophe bond, we are told.

The initial target is to secure at least €100 million in annual aggregate European windstorm retrocession on an industry loss trigger basis, we understand.

The initial target was to secure at least €100 million in annual aggregate European windstorm retrocession on an industry loss trigger basis.

Recoletos Re DAC is set to issue a single tranche of Series 2025-1 Class A notes, that will be sold to cat bond investors and the proceeds be used to collateralize a retrocession agreement between the issuing vehicle and Mapfre Re.

We understand the annual aggregate, territory weighted and industry loss trigger based European windstorm coverage will protect Mapfre Re across three annual terms from December through till the end of November 2028.

The notes feature a €4 billion franchise deductible we are told, meaning a European windstorm event must drive an industry loss as reported by PERILS of that amount or higher to qualify under the terms of the cat bond.

The Class A notes come with an initial attachment probability of 2.67%, an initial expected loss of 2.31% and are being offered to investors with spread price guidance in a range from 4% to 4.5%, sources said.

Update 1:

Having begun as a €100 million issuance this Recoletos Re 2025-1 cat bond has already been upsized to a target for €125 million of retro for Mapfre Re.

At the same time, the price guidance has been updated and lowered to a new range of 3.5% to 4%, we understand.

Update 2:

We’re told that Mapfre Re successfully priced its second 144A catastrophe bond, to secure the upsized target for €125 million of European windstorm retrocession.

The Recoletos Re DAC Series 2025-1 Class A notes were priced to pay investors a spread of 3.5%, so at the bottom of reduced price guidance.