Beazley prices $100m Fuchsia nat cat bond ~21% below initial mid-point of guidance

Beazley has secured the targeted $100 million of fully-collateralized reinsurance from its third natural catastrophe bond sponsorship, as the London Bridge 2 PCC Limited (Fuchsia 3 – 2025-1) notes have now priced roughly 21% below the initial mid-point of guidance, Artemis understands.

London headquartered specialty insurance and reinsurance underwriter Beazley returned to the catastrophe bond market with its third in the Fuchsia series of nat cat bonds in November.

The initial target for this cat bond issuance was to secure $100 million of peak peril catastrophe reinsurance on a fully-collateralized basis from the capital markets

That target did not change during the offering of the notes, but the spread declined a number of times and now has been priced at the low-end of the revised guidance.

Including its private cyber cat bonds and 144A offerings, we now have 10 entries in our extensive Deal Directory for catastrophe bonds sponsored by Beazley.

Beazley is again utilising the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited for its third catastrophe bond covering natural perils and this Fuchsia 3 cat bond will become the fifth 144A cat bond issued through that London Bridge 2 PCC vehicle.

With the notes now priced, it’s confirmed that the Fuchsia 3 Series 2025-1 issuance will provide Beazley with $100 million of excess-of-loss reinsurance covering named storm and earthquake events that impact the United States, Canada and certain parts of the Caribbean, on an indemnity trigger and per-occurrence basis and over a more than three year term, running from January 2026 to the end of March 2029.

The $100 million of Fuchsia 3 2025-1 Class A cat bond notes come with an initial expected loss of 0.93%.

These notes were initially offered to investors with price guidance for an initial risk interest spread of between 3.75% and 4.5%, but as we reported in our first update that price guidance was lowered to a revised range for a spread of 3.5% to 3.75%.

In our second update we reported that the price guidance was reduced further, to a revised range being for a risk interest spread of between 3.25% and 3.5%.

Now, we’re told by sources that the $100 million of Fuchsia 3 cat bond notes have been priced to pay investors an initial risk interest spread of 3.25%, so the low-end of the twice revised range and roughly 21% below the initial mid-point of guidance.

Which is a strong result for Beazley, as the company prioritised price of its latest catastrophe bond over upsizing the issuance, but it also speaks to the confidence cat bond investors have in quality underwriting companies with respected track-records.

But, the notes will pay an almost 3.5 times multiple of the initial expected loss, which is still higher than numerous other recent catastrophe bond transactions, so investors likely still feel adequately compensated for taking on the risk.

You can read all about this London Bridge 2 PCC Limited (Fuchsia 3 – 2025-1) catastrophe bond transaction in our Deal Directory, where you can analyse details of almost every cat bond ever issued.