Hamilton secures upsized $300m Easton Re 2027-1 cat bond at reduced pricing

Hamilton Insurance Group has secured its largest catastrophe bond yet, as the Easton Re Ltd. (Series 2027-1) deal has now been priced to provide an upsized $300 million of collateralized multi-peril retrocessional reinsurance protection, getting the capital markets coverage at a pricing level below initial guidance, Artemis understands.

Hamilton Insurance Group, came back to the catastrophe bond market last month, for what will now become the third 144A catastrophe bond offering under the Easton Re name for the company’s reinsurance entity Hamilton Re.

As we’ve explained before, Hamilton’s $200 million Easton Re Ltd. (Series 2024-1) cat bond is scheduled to mature early next year, which therefore makes this new offering appear to be a renewal of sorts and a meaningful upsizing of that coverage.

Initially, the target was to secure $250 million of collateralized multi-peril retrocessional reinsurance to protect Hamilton.

We then reported in a first update on this Easton Re Series 2027-1 deal, that the target size was raised to $300 million, while at the same time the price guidance on the notes was also lowered.

We’ve now learned from sources that the notes have been successfully priced to secure the upsized $300 million of collateralized multi-peril retrocession priced towards the mid-end of the revised guidance.

We won’t repeat all the details of the cat bond in our updates on size and pricing, so be sure to visit Artemis’ Deal Directory entry for more background on the transaction.

The now confirmed as $300 million Class A tranche of Series 2027-1 notes that Bermuda based special purpose insurer (SPI) Easton Re Ltd. is set to issue will provide Hamilton Re and Hamilton subsidiaries with industry-loss trigger and per-occurrence retro protection against U.S., DC, Puerto Rico, and Virgin Islands named storms, as well as U.S. and Canada earthquakes, over a three-year term.

The $300 million of Series 2027-1 Class A notes from Easton Re come with an initial expected loss of 2.66%.

Initially, these notes were first offered to cat bond investors with spread price guidance in a range from 4.75% to 5.25%, which was then lowered to a revised range of 4% to 4.75%.

We’re now told the $300 million of notes have been priced to pay investors an initial risk interest spread of 4.25%, so below the initial guidance but not quite at the lowest end of the revised range.

Hamilton has maximized its opportunity to increase its retrocessional reinsurance protection from the capital markets with this latest deal, as the company has successfully managed to capitalise on the strong demand being seen from cat bond investors across the market, while also securing the coverage at attractive pricing.

As a reminder, you can read all about this Easton Re Ltd. (Series 2027-1) catastrophe bond transaction in our extensive Deal Directory.