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AXIS’ Northshore Re II cat bond upsized to $350m, pricing tightens


The latest catastrophe bond transaction to be sponsored by Bermuda-headquartered specialty insurance and reinsurance firm AXIS Capital Holdings Ltd. is set to upsize by 40%, as its Northshore Re II Ltd. (Series 2017-1) transaction grows to $350 million, while the price guidance has tightened.

AXIS returned to the catastrophe bond market last week with this Northshore Re II transaction, that launched seeking $250 million of fully-collateralized reinsurance and retrocession for its subsidiaries, including its Lloyd’s syndicate, insurers and reinsurers.

The single tranche of Northshore Re II Series 2017-1 Class A notes will provide industry loss triggered coverage against the impacts of U.S. named storms, U.S. earthquakes and Canadian earthquakes, on a per-occurrence basis across a three-year term.

Now, it looks like AXIS is set to take advantage of the very attractive conditions in the cat bond market, with sources telling us that this deal will be upsized by 40% to $350 million.

When the transaction was launched, the notes were being marketed with coupon price guidance in a wide range from 7.5% to 8.5%, but this has now been tightened down to the lower end of that range at 7.5% to 8%, we understand.

Once again investor demand is helping another cat bond issuance to increase in size, while the pricing looks likely to settle at a competitive level, reflecting the ongoing strong demand for new investment opportunities in the ILS market.

We’ll update you as the Northshore Re II Ltd. (Series 2017-1) catastrophe bond transaction comes to market and you can read details on every cat bond transaction in the Artemis Deal Directory.

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