Sanders Re III Ltd. (Series 2024-1)

US primary insurance giant Allstate has returned for what will be the eighteenth catastrophe bond issuance sponsored by the company, once this Sanders Re III Ltd. (Series 2024-1) multi-peril cat bond issuance completes.

With its latest transaction, Allstate is using Sanders Re III Ltd. for issuance of a single $200 million tranche of Series 2024-1 cat bond notes, we are told

These notes will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the issuer, Sanders Re III, and Allstate.

That reinsurance agreement will cover the primary insurer against personal lines property and auto losses from multiple US perils, specifically from named storm, earthquake, severe weather, wildfire, volcanic eruption, or meteorite impact events, across all US states excluding Florida.

The coverage from this Sanders Re III 2024-1 cat bond will provide Allstate with reinsurance on a per-occurrence and indemnity trigger basis over a more than four year term, from the date of issuance running to maturity at the end of March 2028, we are told.

The $200 million of Class A notes on offer would attach at $5.25 billion of losses to Allstate and cover a share of losses over a $500 million layer of the insurers reinsurance tower, leaving room for this to upsize if investor demand is sufficient.

The Sanders Re III 2024-1 cat bond notes come with an initial attachment probability of 0.95%, an initial expected loss of 0.8884% and are being offered to investors with spread price guidance in a range from 5.75% to 6.5%, we understand.

Update 1:

Allstate is aiming to upsize this Sanders Re III 2024-1 catastrophe bond issuance to between $300 million and $350 million, while the price guidance has been lowered to the bottom of the initial range, to pay investors a spread of 5.75%.

Update 2:

The size target was increased again for this cat bond from Allstate, with the insurer now aiming to double it from the initial $200m to now secure $400m of reinsurance with this deal. The price guidance remains at 5.75%, so the bottom of the initially marketed range.

Update 3:

Allstate successfully secured the doubling in size of its latest catastrophe bond, with this Sanders Re III 2024-1 issuance settling to provide the $400 million in reinsurance and with the spread at 5.75%, so the low-end of guidance.