The latest catastrophe bond from repeat sponsoring U.S. primary insurer Chubb, East Lane Re VI Ltd. (Series 2015-1), has seen its price guidance narrowed as it nears completion, while investor demand may result in the deal upsizing to $250m.
The East Lane Re VI 2015-1 cat bond launched almost two weeks ago and sees Chubb looking to secure a new five-year source of fully-collateralized reinsurance protection against losses from multiple U.S. perils. The cat bond launched as a single Class A tranche of notes with a preliminary size of $225m.
Now, sources have told Artemis that the East Lane Re VI 2015 cat bond may upsize, with the latest deal information showing a range of $225m to $250m for the single tranche of notes. At the same time the coupon price guidance has narrowed and points towards a mid to lower end of pricing close.
The single tranche of Class A notes launched with price guidance of 3.5% to 4%, but we’re told this has been narrowed to 3.5% to 3.75%.
With an expected loss of 1.24% this cat bond will still come in with a multiple of above 2 times EL, it would seem, in line with the last year’s issuance.
The East Lane Re VI cat bond will protect Chubb against losses from U.S. named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impact and volcanic eruption risks on a per-occurrence basis and using an indemnity trigger.