Titania Re Ltd. (Series 2024-1)

This is the fourth Titania Re catastrophe bond issuance to be sponsored by Bermuda based global reinsurance company Ariel Re, as it looks to secure additional capacity from the capital markets for retrocessional reinsurance to protect its Lloyd’s Syndicate 1910 operation.

Syndicate 1910 is again the ultimate ceding company, being the main underwriting vehicle that private equity backed reinsurer Ariel Re principally uses for its global reinsurance underwriting business.

For its fourth Titania Re cat bond, Ariel Re is once again seeking coverage for the same peak perils of named storm and earthquake risk across the US, Canada and related territories.

Bermuda domiciled special purpose insurer (SPI) Titania Re Ltd. is targeting issuance of two tranches of Series 2024-1 notes, which will be sold to investors and the proceeds used to collateralize a multi-year source of retro reinsurance for Ariel Re, covering certain losses from U.S. 50 state, Puerto Rico, U.S. Virgin Islands, D.C. and Canada named storms and earthquakes.

Both tranches of Titania Re 2024-1 notes will provide Ariel Re with annual aggregate retro protection, over a three year term.

Titania Re Ltd. is aiming to issue a $100 million or larger Class A tranche of Series 2024-1 notes that will have an initial attachment point at $2.85 billion of losses, with exhaustion set at $3.4 billion and a $200 million franchise deductible to be taken into account before losses can aggregate against them.

The Class A notes come with an initial attachment probability of 2.8%, an initial base expected loss of 2.38% and they are being offered to cat bond investors with price guidance in a range from 8% to 9%.

An as yet unsized Class B tranche of notes are riskier, attaching at $2.3 billion of losses and covering a share up to the $2.85 billion level, again with a $200 million franchise deductible enforced.

The Class B tranche of notes come with an initial attachment probability of 4.81%, an initial base expected loss of 3.97% and they are being offered to cat bond investors with price guidance in a range from 12.25% to 13.25%.

As you might expect, while these are notes that cover the entire US and Canada, the Class A tranche sees Florida named storm as 63.5% of its expected losses and the Class B tranche almost 60%.