AXIS to secure $200m Northshore Re II 2018 cat bond at lower pricing


Bermuda-based specialty insurance and reinsurance company AXIS Capital Holdings Ltd. is now set to secure an upsized $200 million of coverage from its new Northshore Re II Ltd. (Series 2018-1) catastrophe bond, while at the same time the pricing has now been fixed below the bottom end of the initial range.

This third catastrophe bond from AXIS Capital sees the company seeking four years of coverage from Northshore Re II 2018-1 to provide it with collateralized reinsurance and retrocession protection against losses from U.S. & Puerto Rico named storms, U.S. & Canada earthquakes and European windstorm catastrophe events.

At launch the cat bond was aiming for a target size of $150 million or greater and we’re told that AXIS Capital has secured this amount and the Northshore Re II 2018-1 cat bond will be upsized to offer the company $200 million of reinsurance.

The $200 million cat bond will provide AXIS with reinsurance on an annual aggregate basis, across four annual risk periods, and the cat bond features industry loss triggers for each of the covered perils.

At launch the Series 2018-1 Class A notes, with an initial expected loss of 4.47%, were offered to ILS investors and funds with coupon price guidance ranging from 8% to 8.5%. That range was subsequently lowered, as we explained in an update on the deal, to be offered to investors with a coupon range from 7.5% to 8%.

The pricing coupon has now been fixed at the middle of the reduced range at 7.75%, we understand, which means the notes will offer investors a multiple of 1.7 times the expected loss.

AXIS has another catastrophe bond, the $350 million Northshore Re II Ltd. (Series 2017-1), already in-force. So with this new addition of the 2018 deal, AXIS will have its largest slice of cat bond backed reinsurance and retrocession ever.

You can read all about this Northshore Re II Ltd. (Series 2018-1) catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.

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