Winston Re Ltd. (Series 2024-1)

This is a debut catastrophe bond for Florida focused property insurer the Tower Hill Insurance Exchange, who is seeking $200 million of more in fully-collateralized named storm reinsurance for the state of Florida, with this first Winston Re Ltd. catastrophe bond.

For Tower Hill’s first cat bond, a Bermuda based company named Winston Re Ltd. has been established for Tower Hill’s debut catastrophe bond.

We’ve been told that Winston Re Ltd. will look to issue two tranches of notes, totalling $200 million across two tranches, to be sold to investors and the proceeds used to collateralize the reinsurance agreements with Tower Hill.

The Winston Re 2024-1 catastrophe bond will provide Tower Hill with reinsurance protection against named storm losses in Florida, on an indemnity and per-occurrence basis, over a three hurricane season term, starting from June 2024 and with maturity due in February 2027, we understand.

A $100 million tranche of Class A notes will provide Tower Hill with reinsurance protection from an $850 million attachment point to exhaustion at $1.1 billion of losses, giving them an initial attachment probability of 1.73%, an initial expected loss of 1.56% and these notes are offered to investors with spread guidance in a range from 10% to 11%.

An also $100 million Class B tranche of notes are riskier and will sit beneath the Class A’s, attaching at $600 million and covering losses to $850 million, giving them an initial attachment probability of 2.28%, an initial expected loss of 1.97% and these notes are offered to investors with spread guidance in a range from 11.75% to 12.75%.

Update 1:

We understand that Tower Hill’s target for its debut catastrophe bond has now risen, with the company looking to secure up to $400 million in reinsurance from this issuance.

The Class A notes are targeted at between $225 million and $250 million, with price guidance now fixed at 10.75%, so in the upper-half of the initial range.

The Class B tranche of notes are now pitched at between $100 million and $150 million, while their price guidance has also been fixed at 11.75%, so at the lower-end of the initial range.

Update 2:

Tower Hill has tightened its target for the size of its debut cat bond, with now between $350 million and the $400 million being sought, while the price guidance has been lowered for one class of notes.

The Class A notes are targeted at $250 million, with price guidance back in a range of between 10.25% and 10.75%, so improved execution is now being sought.

The Class B tranche of notes remain pitched at between $100 million and $150 million, while their price guidance remains fixed at 11.75%, so at the lower-end of the initial range.

Update 3:

Tower Hill secured the doubled target size of $400 million for its debut catastrophe bond.

The Class A notes settled at $250 million in size and priced at 10.25%, so the low-end of the revised range.

The Class B tranche of notes settled at $150 million in size, while their pricing remained at the 11.75% spread level, so at the lower-end of the initial range.