Cincinnati Insurance seeks lower pricing for $150m Skyline Re II multi-peril cat bond

Cincinnati Insurance Companies is now targeting lower pricing for the $150 million or more in fully-collateralized reinsurance from the capital markets that its new Skyline Re II Ltd. (Series 2025-1) catastrophe bond deal will provide, sources have told Artemis.

As we reported when this cat bond emerged in late November, this is Cincinnati Insurance Companies first visit to the catastrophe bond market since 2017.

At this stage we’re told the target for the cat bond remains the same in size of issuance terms, but the sponsor is aiming to secure the fully-collateralized, multi-year reinsurance at a keener price.

Skyline Re II Ltd. is still offering a $150 million tranche of Series 2025-1 Class A notes to investors, which are designed to provide Cincinnati Insurance with a source of property catastrophe reinsurance coverage from the capital markets, protecting it against losses from the US perils of named storms, earthquakes, severe weather and fires.

That reinsurance coverage will be on a per-occurrence and indemnity trigger basis, running across a four-year term until the end of 2026.

The $150 million of Series 2025-1 Class A notes that Skyline Re II is offering come with an initial base expected loss of 1.27% and were first offered to cat bond investors with price guidance for a risk interest spread of between 4% and 4.75%.

We’re now told that price guidance has been revised, to a new range for a spread of between 3.5% and 4% to be paid.

So it appears Cincinnati Insurance may secure its new catastrophe bond coverage priced at the bottom of initial guidance or below.

You can read all about this new Skyline Re II Ltd. (Series 2025-1) catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.