Groupama gets €150m Quercus Re cat bond windstorm reinsurance priced at low-end

Groupama has now secured its targeted €150 million of multi-year and fully-collateralized windstorm reinsurance protection from the new Quercus Re DAC 2024-1 catastrophe bond issuance, while the coverage has been secured at reduced pricing, as the notes priced at the lower end of initial guidance, Artemis has learned.

French mutual insurance and reinsurance company Groupama returned to the catastrophe bond market with an offering of Quercus Re DAC notes towards the end of June.

The target was to secure a new capital markets backed source of European windstorm reinsurance for French risk, with a proposed issuance size of €150 million for the Quercus Re DAC cat bond.

Prior to this new cat bond, Groupama Assurances Mutuelles had last been featured in our cat bond Deal Directory when it was the beneficiary of a private cat bond in 2023.

Before which, Groupama had sponsored Green Valley cat bonds in 2007 and 2010, then Green Field cat bonds in 2010 and 2013.

Details of every Groupama catastrophe bond can be found in our extensive Deal Directory here.

Quercus Re DAC was registered in Ireland as a Designated Activity Company and €150 million of notes were offered to insurance-linked securities (ILS) investors, with the issuance set to provide the collateral to back a source of windstorm reinsurance protection across France for Groupama companies.

The coverage from these Quercus Re DAC cat bond notes is designed to run across a roughly three year term to July 8th 2027, while the targeted reinsurance protection will be annual aggregate in nature, structured with an indemnity trigger, with deductibles and loss caps also in place that define the attachment and exhaustion.

We’re told that the notes have now been priced and as a result Groupama has secured its goal of €150 million of windstorm reinsurance protection through this first cat bond issuance by Quercus Re DAC.

The now confirmed to be €150 million of notes Quercus Re DAC is issuing have an initial attachment probability of 3.57% and an initial expected loss of 2.30%.

At first, the notes were offered to cat bond investors with a spread guidance range of 8% to 8.75%.

As we later reported, the price guidance was narrowed towards the lower-end, to an updated range of 8% to 8.25%.

Now, sources have told us that the notes have been priced to pay investors an insurance risk spread of 8%, so the bottom end of the initial guidance and indicating a multiple-at-market of 3.48 times the initial expected loss.

Groupama has now finalised its latest and sixth catastrophe bond issuance for the sponsor that we have covered over the years with evidently strong price execution.

You can read all about this new Quercus Re DAC 2024-1  catastrophe bond and every other cat bond deal in the Artemis Deal Directory.