American Coastal secures upsized $200m Armor Re II 2024-2 cat bond

American Coastal Insurance Company (AmCoastal) has now successfully priced its latest catastrophe bond and has secured the Armor Re II Ltd. (Series 2024-2) issuance at its upsized $200 million target, while the spread was finalised below initial guidance.

AmCoastal Insurance returned to the cat bond market with this new Armor Re II 2024-2 deal in November, which at the time had an initial target size to secure $100 million of reinsurance.

But, as we then reported in our first update on this cat bond issuance, the insurer increased the target size, with between $100 million and $150 million of reinsurance then being sought.

Then, in a second update on the deal, we learned that the size target was increased again, with between $150 million and $200 million of reinsurance becoming the target for AmCoastal Insurance.

Now, sources have told us that the upper-end target size has been secured, with this Armor Re II 2024-2 cat bond set to provide AmCoastal $200 million of reinsurance from the capital markets.

So the now confirmed as $200 million of Series 2024-2 Class A cat bond notes that Armor Re II will issue are set to provide American Coastal with just over three-year’s of fully-collateralized Florida named storm reinsurance protection, running to the end of December 2027, on an indemnity trigger and per-occurrence basis over that risk period.

The $200 million of Series 2024-2 Class A notes that Armor Re II Ltd. will issue have an initial expected loss of 0.59% and were initially offered to cat bond investors with spread price guidance in a range from 9% to 10%.

That price guidance was lowered, first to the bottom-end of that range, at 9% and then in our second update we reported that the guidance reverted back to a range again, but at a lower-level of between 8.5% and 9%.

We’re now told that when pricing the deal for $200 million of protection, the spread was finalised at 8.5%, so the low-end of the revised and reduced price guidance, which is a roughly 11% decline in pricing while this cat bond was marketed.

Being a rare Florida wind only catastrophe bond for this time of the year, the execution achieved for AmCoastal sends a strong signal to other Florida insurance market participants that the catastrophe bond market is currently providing ample capacity and attractive pricing, which might encourage some to explore the market earlier than usual in 2025.

You can read all about this new Armor Re II Ltd. (Series 2024-2) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.