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American Integrity’s new cat bond targets up to $75m at top-end pricing


American Integrity Insurance Company of Florida, Inc’s newest and third catastrophe bond, the Integrity Re Ltd. (Series 2019-1) transaction, is now targeting up to $75 million in size, with pricing fixed at the top-end of initial guidance.

american-integrity-logoThe Florida headquartered primary insurer returned to the catastrophe bond market recently, seeking a third slice of collateralized reinsurance protection through its Integrity Re Ltd. special purpose insurance vehicle.

When the transaction launched, American Integrity was targeting $75 million of reinsurance protection from the cat bond transaction. But we’re told that the target size is now being pitched at between $50 million and $75 million, as demand from investors may undershoot the original ambitions of the issuance.

The Integrity Re 2019-1 cat bond issuance will feature a single tranche of notes which will be sold to investors and the proceeds used to collateralize a reinsurance arrangement for American Integrity, via ceding reinsurer Hannover Re.

The reinsurance coverage that American Integrity will benefit from with its latest cat bond will be across a four-year term, providing protection against certain Florida named storm and severe thunderstorm losses on an indemnity trigger, per-occurrence and cascading basis.

At launch, the single tranche of Series 2019-1 Class A notes being issued by Integrity Re Ltd. were targeted at $75 million in size, and with the initial expected loss 1.14% the initial price guidance was marketed in a range from 4.25% to 4.75%.

Now, we understand that the size is set for between $50 million and $75 million, while the pricing has been fixed to the upper-end of guidance, at 4.75%.

This offers a much healthier multiple to the cat bond investors set to allocate to this Integrity Re 2019 cat bond, as they continue to demonstrate that they want to benefit from higher rates in Florida and other regions affected by major catastrophe losses across recent years.

The multiples are definitely rising for this mid-year renewal for all cat bonds that have been issued so far. It will be interesting to see whether the higher multiples persist through the rest of the year.

We’ll keep you updated as this Integrity Re Ltd. (Series 2019-1) cat bond comes to market and you can read about this and every other transaction in the Artemis Deal Directory.


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