According to sources, Florida’s Citizens Property Insurance Corporation’s latest catastrophe bond transaction, the Everglades Re II Ltd. (Series 2017-1) deal, is set to upsize to $300 million in size before it completes.
The transaction launched as a $250 million cat bond offering, on which the pricing has tumbled as our source told us that the coupon is set to drop down to the bottom of initial guidance at 5%.
Earlier today we wrote that the pricing had tightened and fallen, but at the time it was uncertain whether the size of the deal would increase. The price guidance on these notes began at a range of 5% to 5.75%, then tightened to 5% to 5.25%, before now settling at the bottom of the range.
Then, this afternoon we covered the approval of Florida Citizens 2017 reinsurance program, which is slated to be around $1.3 billion in size. But still, the split between traditional reinsurance and catastrophe bonds were unknown.
Now, we’re told that the transaction is set for pricing as a $300 million offering of Everglades Re II Series 2017-1 Class A notes, which will offer their investors a 5% spread.
Yet again this is a sign of the appetite of catastrophe bond investors, as this latest Florida Citizens cat bond is perhaps the most efficiently priced it has sponsored to date, thanks to the very keen pricing.
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