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Kin now seeks ~10% price reduction for Hestia Re 2023 catastrophe bond


Kin Insurance has lowered the price guidance for its new Hestia Re Ltd. (Series 2023-1) catastrophe bond for the second time, with the direct-to-consumer insurtech now looking to settle the issuance with spreads roughly 10% below the initial mid-point of guidance.

kin-insurance-logoIt’s further evidence that catastrophe bond rates-on-line have likely already peaked and may actually be coming off those highs a little, now that the market is increasingly busy, investor appetite high and cat bond fund managers seeing some positive inflows of new capital.

Timing is everything, of course, and it looks as if Kin could see very strong execution for its latest catastrophe bond deal, in pricing terms at least.

Still, the Hestia Re 2023-1 cat bond issuance remains at $100 million in size, with Kin seemingly prioritising the cost of cover over the amount of capacity secured from its second catastrophe bond.

Kin returned to the catastrophe bond market back in February, seeking $100 million or more in Florida named storm reinsurance protection from the capital markets.

These $100 million of Hestia Re 2013-1 Class A cat bond notes are being issued to provide Kin with a three-year source of fully-collateralized Florida named storm reinsurance, on an indemnity trigger and per-occurrence basis.

The Hestia Re 2023-1 Class A cat bond notes come with an initial base expected loss of 1.04% and at their initial launch were offered to cat bond investors with price guidance in a range from 10.5% to 11.5%.

As we reported yesterday, the price guidance was lowered to below that range, with a target set for the cat bond deal to settle paying investors a spread in the 10% to 10.5% range.

But, already this price guidance has been lowered even further, with a spread target of between 9.75% to 10% now aimed for.

At that level, Kin could see its new Hestia Re 2023 catastrophe bond pricing roughly 10% lower than the initial guidance mid-point.

That’s a clear sign of cat bond investors recognising the attractiveness of Kin’s reinsurance tower, but also of the fact the cat bond market has now definitely peaked, in terms of rates, perhaps moving slightly lower than that peak as the market stabilises, investor appetite rises and investor flows continue to cat bond funds.

We’ll update you once the new Hestia Re 2023-1 catastrophe bond is priced.

You can read all about the Hestia Re Ltd. (Series 2023-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.

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