Winston Re Ltd. (Series 2026-1)

Florida focused property insurer the Tower Hill Insurance Exchange is back in the catastrophe bond market and looking to sponsor what will become its third issuance, as it turns again to the capital markets to source more reinsurance protection.

For its third cat bond, Tower Hill is again using its Bermuda based special purpose insurance company named Winston Re Ltd.

Winston Re Ltd. is offering three tranches of Series 2026-1 Class A notes to investors, with the proceeds of their sale set to be used to collateralize reinsurance agreements between the SPI and Tower Hill.

Just like its first two cat bonds, we’re told by sources that this Winston Re 2026-1 issuance will provide Tower Hill with reinsurance protection against named storm losses in Florida.

The reinsurance protection from the Winston Re Series 2026-1 notes will be structured on an indemnity trigger and per-occurrence basis, running across a three hurricane season term, beginning June 2026 and with maturity due in 2029, we understand.

For the first time though, while two tranches are typical indemnity occurrence notes that run their protection across every event that might attach their coverage, a third tranche is the first to be structure on a third event coverage basis for Tower Hill, sources said.

A $100 million Series 2026-1 Class A tranche of notes Winston Re is offering will provide Tower Hill with reinsurance protection from an initial attachment point of $900 million to exhaustion at $1.1 billion of losses, we are told.

That gives the Class A notes an initial attachment probability of 1.42%, an initial base expected loss of 1.29% and these notes are being offered to investors with spread guidance in a range from 5.5% to 6%.

An also $100 million Series 2026-1 Class B tranche of notes will provide Tower Hill with reinsurance protection from an initial attachment point of $700 million to exhaustion at $900 million of losses, so sit beneath the A’s.

Which gives the slightly riskier Class B notes an initial attachment probability of 1.86%, an initial base expected loss of 1.59% and they are being offered to investors with spread guidance in a range from 6.25% to 6.75%.

The final Class C tranche of notes will cover third events only, from an attachment of $25 million up to exhaustion at $100 million, we understand. It’s said that there is a deductible in-place which will be double the size of the layer this tranche occupies for each loss period.

The Class C notes will have an initial attachment probability of 0.92%, an initial base expected loss of 0.49% and they are being offered to investors with spread guidance in a range from 7% to 7.75%.

Those third event notes ultimately provide a kind of frequency reinsurance protection for the occurrence of three named storm loss events that cause Tower Hill an ultimate net loss of more than $25 million.