Titania Re Ltd. (Series 2021-1)

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Titania Re Ltd. (Series 2021-1) – At a glance:

  • Issuer: Titania Re Ltd.
  • Cedent / sponsor: Syndicate 1910 (Ariel Re)
  • Placement / structuring agent/s: TigerRisk Capital Markets & Advisory is sole structuring agent and joint bookrunner. Aon Securities is joint bookrunner.
  • Risk modelling / calculation agents etc: AIR Worldwide
  • Risks / perils covered: U.S., Puerto Rico, U.S. Virgin Islands, D.C., Canada named storm and earthquake
  • Size: $150m
  • Trigger type: Industry loss index
  • Ratings: NR
  • Date of issue: Jun 2021

Titania Re Ltd. (Series 2021-1) – Full details:

This is the first catastrophe bond ever to benefit an entity of reinsurance firm Ariel Re, as the ceding company for this new transaction is Lloyd’s Syndicate 1910, the vehicle through which Ariel Re principally operates.

For its first ever catastrophe bond, a special purpose insurer (SPI) named Titania Re Ltd. has been registered in Bermuda.

Titania Re Ltd. will look to issue a single $150 million tranche of Series 2021-1 Class A notes, that will be sold to investors and the proceeds used to collateralize underlying aggregate reinsurance agreements between the SPI and cedent Syndicate 1910.

The notes will provide Syndicate 1910 with a multi-year source of reinsurance to cover certain losses from U.S., Puerto Rico, U.S. Virgin Islands, D.C. and Canada named storms and earthquakes.

The coverage will run across a three year period, to June 2024, we understand and is structured using an industry loss trigger providing annual aggregate protection, attaching at an index loss level of $1 billion and covering up to $1.33 billion, after a $45 million per-event deductible, we understand.

We’re told that the $150 million of Series 2021-1 Class A notes will have an initial expected loss of 1.98% and have been offered to investors with coupon price guidance in a range from 5% to 5.5%.

Another notable fact with this transaction is that TigerRisk Capital Markets & Advisory is the sole structuring agent for the Titania Re catastrophe bond, which we believe is the first time the broker’s capital markets team has taken that role on a 144A cat bond transaction.

Update 1:

The price guidance for the Class A notes has been lowered to below the initial range, with the latest offered being 4.5% to 5%, representing a roughly 10% drop in price from the mid-point of the initial range to this updated spread.

Update 2:

The pricing was finalised with a coupon of 4.5%, so the low-end of the reduced guidance range, representing a roughly 14% drop on price from the initial mid-point.

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