Allied World’s new 2001 CAT Re cat bond could upsize to $275m

Allied World Assurance Company (AWAC) is another sponsor looking to upsize on its original ambitions, as the company is now seeking up to $275 million of reinsurance protection from its 2001 CAT Re Ltd. (Series 2023-1)  renewal transaction.

Allied World returned to the cat bond market at the start of this month, seeking $250 million in coverage from this new issuance, which will go some way to renewing its soon to mature November 2020 issuance, a $210 million 2001 CAT Re 2020-1 deal.

So it’s encouraging to see Allied World’s appetite increasing, for this cat bond which will increase its capital markets backed retrocessional reinsurance coverage.

2001 CAT Re Ltd. will issue a single Class A tranche of Series 2023-1 notes that will protect Allied World and subsidiaries against certain losses from U.S named storms, U.S. and Canada earthquakes, and European windstorm risks, on an industry-loss trigger and per-occurrence basis across three annual risk periods from January 1st 2024.

The now up to $275 million of Series 2023-1 Class A notes to be issued by 2001 CAT Re Ltd. come with an initial expected loss of 5.13% and were initially offered to cat bond investors with spread price guidance in a range from 14% to 15%.

We’re now told that the guidance range has dropped and also widened, with the up to $275 million of notes offered with spread guidance of 12.5% to 14%, sources said.

Which suggests Allied World is working with its partners to maximise the effectiveness of this cat bond issuance, providing a lower but wider guidance range as it seeks a slight upsizing, with best execution the target, it appears.

Read all about this new 2001 CAT Re Ltd. (Series 2023-1) catastrophe bond and more than 950 other cat bond transactions in the Artemis Deal Directory.