The Hartford Fire Insurance Company is getting prepared to launch a $100m catastrophe bond through its Foundation SPV based in the Cayman Islands. Foundation Re III Ltd. is currently being marketed at a preliminary amount of $100m as a transaction designed to provide the Hartford with reinsurance on a per-occurrence basis over a four year period against certain U.S. hurricanes.
This would be the Hartford’s third Foundation transaction. The previous two were both around the $250m mark so there is a good chance that this one could upsize before completion. Proceeds from the sale of the notes will be invested in government funds such as treasury bills which are U.S. domiciled and have a high rating. The trigger for the transaction is a state-weighted PCS index-based industry loss trigger.
This deal is expected to close by the end of January. Standard & Poor’s have given the single tranche of notes a preliminary rating of ‘BB+’.
Further details on the transaction structure are available in the Artemis Cat Bond Deal Directory.