Achmea lifts Windmill III Re cat bond target to €100m, as price guidance drops

Dutch headquartered Europe-focused insurance group Achmea has now lifted its target for reinsurance protection from its new Windmill III Re DAC (2024-1) catastrophe bond to €100 million, while at the same time the price guidance has dropped, reflecting investor appetite for diversification opportunities.

Achmea returned to the cat bond market in late May, seeking at least €75 million in collateralized European windstorm reinsurance protection from the new Windmill III Re cat bond issuance.

Which now positions this new cat bond from Achmea to fully replace its maturing 2020 cat bond, Windmill II Re DAC (2020), that also provided Achmea €100 million of windstorm reinsurance.

This new Windmill III catastrophe bond will be the fourth in the Windmill series of cat bond deals for sponsor Achmea.

The new Windmill III Re DAC notes will provide Achmea with a four-year source of collateralized reinsurance protection from the capital markets to cover certain European windstorm losses on an indemnity trigger and per-occurrence basis, we are told.

At launch to investors the issuance featured €75 million of Series 2024-1 Class A notes, but we’re now told that has been raised to become a €100 million offering.

The Windmill III Re Series 2024-1 Class A cat bond notes come with an initial expected loss of 2.19% and were initially offered to investors with price guidance in a range from 5.75% to 6.5%.

We’re now told that the price guidance has been updated with a lower range of 5.25% to 5.75% now being offered to investors.

Being a European peril focused cat bond offering, this Windmill III Re issuance for Achmea has clearly been met with strong demand from investors.

That’s likely due to the fact this is a rare opportunity for portfolio diversification outside of the United States, as the vast majority of new cat bonds in the market in recent weeks have included US hurricane risks, or other US perils.

Given the way spreads have been widening and cat bond issue prices rising of late, this is evidence that the trend is not one that will be seen across the market, suggesting that other potential cat bond sponsors seeking reinsurance for a diversifying peril class could also find market conditions attractive right now.

You can read all about this Windmill III Re DAC (2024-1)  transaction and every catastrophe bond deal in our extensive Artemis Deal Directory.