American Integrity’s target for Integrity Re II cat bond lifts to $150m


Insurer American Integrity has lifted its target for its latest catastrophe bond, with the  Integrity Re II Pte. Ltd. (Series 2020-1) transaction now aiming to secure the company up to $150 million of multi-year catastrophe reinsurance protection.

american-integrity-logoThe Integrity Re II 2020 deal launched at the beginning of the month, with American Integrity looking to secure its fourth catastrophe bond issuance.

This is the sponsors first cat bond to be issued out of Singapore, as American Integrity looks to take advantage of the country’s ILS grant program to reduce its issuance costs.

With its latest cat bond, the insurer is seeking to expand its capital markets backed sources of reinsurance against Florida named storms and hurricanes, coming to market again with the assistance of German reinsurance firm Hannover Re which will front the capital markets by acting as ceding reinsurer for the deal.

At launch of this cat bond, American Integrity was seeking at least a $125 million source of capital markets backed named storm reinsurance coverage across a three-year term.

Now, we understand from sources that investor demand for the deal looks set to help it upsize and that the Integrity Re II 2020 catastrophe bond issuance is now targeting from $135 million to as much as $150 million of protection for the insurer.

This will provide American Integrity with reinsurance protection against Florida named storms on an indemnity trigger and per-occurrence basis.

The Class A tranche of notes, which are now slated to be between $135 million and $150 million in size, and have an initial expected loss of 1.98%, were initially offered to investors with coupon price guidance in a range from 6.75% to 7.25%.

We’re now told that pricing has risen to the upper-end of that guidance range, with the upsized tranche now being offered with fixed pricing of 7.25%.

As the first pure Florida wind 144a catastrophe bond issuance for a while, this Integrity Re II Pte. transaction provides a glimpse into Florida reinsurance pricing for 2020.

The multiple looks set to be high, providing investors a significant uplift over prior year transactions at similar risk levels and suggesting reinsurance rate increases may be up around the 15% to 20% level, in some cases higher, at the June 2020 renewal season.

We’ll update you as this new Integrity Re II Pte. Ltd. (Series 2020-1) catastrophe bond continues comes to market and you can read about every cat bond deal in the Artemis Deal Directory.

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