Kin looks to upsize Hestia Re 2025-1 cat bond to as much as $300m

Direct-to-consumer insurtech company Kin Insurance is looking to upsize its new Hestia Re Ltd. (Series 2025-1) catastrophe bond transaction, with now as much as $300 million of Florida named storm reinsurance being targeted from the deal, we can report.

Kin returned to the cat bond market in early February looking to secure $200 million or more in Florida named storm protection from this Hestia Re 2025-1 deal.

Kin had sponsored its debut $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond cover back in April 2022.

The company then returned with a $100 million Hestia Re Ltd. (Series 2023-1) issuance in March 2023.

Kin’s 2022 Hestia Re cat bond is still marked down around 10 points in secondary broker pricing sheets, on exposure to potential losses from hurricane Ian. But it is due to mature in April this year, so as we said it will be interesting to see if those notes draw to par, or are extended to allow for further development.

With this new issuance, initially Hestia Re Ltd. was looking to issue two tranches of Series 2025-1 notes with a preliminary target of $200 million in size, to provide Kin with a three hurricane season source of fully-collateralized Florida named storm reinsurance, on a indemnity trigger and per-occurrence basis, running from June 1st this year to three years after the issuance completes.

Now, sources have told us that Kin’s target has lifted, with from $275 million to as much as $300 million of reinsurance sought from this two tranche Hestia Re 2025-1 issuance.

What was a $100 million tranche of Hestia Re Series 2025-1 Class A notes are now targeted at from $175 million to $200 million in size, we are told.

The Hestia Re 2025-1 Class A notes have an initial base expected loss of 1.51% and were first offered to cat bond investors with price guidance in a range from 7.25% to 8%, but that has now fallen to a revised and lower range of 6.75% to 7.25%.

The $100 million Class B tranche which are riskier remain at that size, we understand.

The Hestia Re 2025-1 Class B notes have an initial base expected loss of 2.03% and were first offered to cat bond investors with price guidance in a range from 8.25% to 9%, but that has also fallen and now been fixed at the low-end of 8.25%.

Both tranches of notes look set to price with lower multiples-at-market than Kin’s previous catastrophe bond deals, as the insurer looks set to benefit from the strong deal execution seen in the cat bond market this year.

You can read all about the Hestia Re Ltd. (Series 2025-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.