Heritage targets lower pricing for Citrus Re 2025-1 catastrophe bond

We’ve learned that Heritage Insurance Holdings, Inc., the nationally expansive, Florida headquartered property and casualty insurer, is now targeting lower pricing for its new $200 million Citrus Re Ltd. (Series 2025-1) catastrophe bond issuance.

Heritage Insurance returned to the catastrophe bond market in February with a target to secure $200 million or more in collateralized US named storm reinsurance from its latest Citrus Re deal.

Now, we’re told that the size guidance remains unchanged at this stage, but that the price guidance has fallen for both of the tranches of notes being offered.

This new Citrus Re 2025-1 catastrophe bond will become the tenth cat bond issuance under the Citrus Re name that Heritage has sponsored and we have listed in our extensive cat bond Deal Directory.

With this new Citrus Re 2025-1 catastrophe bond, Heritage is seeking reinsurance across Alabama, Florida, Georgia, Mississippi, North Carolina and South Carolina for its Heritage Property & Casualty Insurance Company and Narragansett Bay Insurance Company (NBIC) entities, as well as for Hawaii to cover its Zephyr Insurance underwriting company.

This Citrus Re Series 2025-1 cat bond notes will provide Heritage and its subsidiaries with a multi-year source of southeast US named storm reinsurance protection and Hawaii named storm reinsurance protection, on an indemnity trigger and per-occurrence basis, across a three-year term from June 1st 2025 to May 31st 2028.

The Class A notes will cover named storm risks across the southeastern US states and remain at $100 million in size, we understand.

With an initial expected loss of 1.57%, the Class A notes were first offered to investors with spread guidance in a range from 8% to 8.75%, but we’re now told that guidance has fallen to between 7.75% and 8%.

The Class B tranche of notes will cover named storm risks in Hawaii only and also remain at their initial $100 million size, we are told.

With an initial expected loss of 1.33%, the Class B notes were first offered to investors with spread guidance in a range from 4.5% to 5%, which we’re now told has been fixed at the low-end of 4.5%.

As a result, Heritage Insurance looks to be seeking to maximise execution for its latest catastrophe bond, focusing on securing the reinsurance protection at the best possible pricing at this time.

You can read all about this Citrus Re Ltd. (Series 2025-1)  catastrophe bond and every other cat bond issued in our extensive Artemis Deal Directory.