Germania Insurance targets lower pricing for debut $100m Handshake Re cat bond

Germania Insurance is now targeting lower pricing for its debut Handshake Re Ltd. (Series 2025-1) catastrophe bond issuance, while the size goal remains to secure $100 million of multi-peril catastrophe reinsurance from the deal, Artemis has learned.

Germania Insurance, often better known as Germania Farm Mutual Insurance Association, is the largest farm mutual insurance company in Texas.

The company began its debut catastrophe bond sponsorship journey earlier this month, with an initial goal to secure $100 million of fully-collateralized catastrophe reinsurance protection from the first Handshake Re issuance.

That target remains and given this cat bond’s coverage will only span an equivalently sized layer of Germania Insurance’s reinsurance tower, the company is on-track to achieve its $100 million goal.

But, we’re told that the firm’s pricing ambitions have been reduced, with the farm mutual insurer seeking to pay a lower than guidance spread for the reinsurance protection from Handshake Re Ltd.

So, Handshake Re Ltd. is still offering a $100 million Class A tranche of Series 2025-1 notes, that will provide Germania Insurance with a four year source of reinsurance protection against losses from named storms, severe thunderstorms and winter storms in the state of Texas, on an indemnity trigger and per-occurrence basis.

The Class A notes come with an initial expected loss of 2.11% and were first offered to cat bond investors with price guidance for a spread of between 4.75% and 5.25%.

We’re now told that price guidance has been revised to a narrower and lower range of between 4.5% and 4.75%.

So Germania Insurance looks set to secure attractive price execution for its debut 144A catastrophe bond sponsorship, a further positive signal for other first-time market entrants.

You can read all about this Handshake Re Ltd. (Series 2025-1) catastrophe bond from first time sponsor Germania Insurance and every other cat bond ever issued in our extensive Artemis Deal Directory.