Argo’s Loma Re cat bond grows again to $172m, prices at low-end


Argo Group’s latest catastrophe bond transaction, Loma Reinsurance (Bermuda) Ltd. (Series 2013-1), has grown in size again before closing we understand, with one tranche increasing by $7m taking the total cat bond size to $172m for Argo.

Loma Reinsurance (Bermuda) sees insurance and reinsurance company Argo Group seeking a four-year source of reinsurance and retrocessional protection from capital market investors against tropical cyclones, U.S. earthquakes and U.S. severe thunderstorms on an annual aggregate basis.

The deal launched at a preliminary size of $100m from three tranches of notes, which quickly grew to $165m across the tranches while price guidance was lowered on all three tranches.

Now the latest Loma Re cat bond has grown again, but only slightly by $7m, increasing to $172m in size. At the same time, the three tranches of notes being offered by Loma Re (Bermuda) have all seen pricing settle at the bottom of the reduced guidance ranges.

The Class A tranche launched with price guidance of 10.5% to 11.5%, which was reduced to a range of 9.75% to 10.5%. Pricing has now settled at 9.75%, a reduction of over 11% from the mid-point of the launch range.

The Class B tranche launched with price guidance of 12.75% to 13.75%, which was lowered to 12% to 12.75%. Pricing settled at 12%, a reduction of over 9% from the launch price guidance mid-point.

The Class C tranche launched with price guidance of 17.5%, which was subsequently reduced to guidance of 17% to 17.5%. Pricing settled at 17%, a small reduction of about 3% from the launch guidance.

This latest cat bond from Argo is scheduled to complete before the end of the year

Read all about Loma Reinsurance (Bermuda) Ltd. (Series 2013-1) in our catastrophe bond and ILS Deal Directory.

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