Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Liberty Mutual secures raised $150m target for new Mystic Re cat bond

Share

Liberty Mutual, the US primary insurer and global reinsurer, has successfully secured the upsized target of $150 million of collateralized reinsurance protection with its new Mystic Re IV Ltd. (Series 2023-1) catastrophe bond transaction.

liberty-mutual-insurance-logoLiberty Mutual came back to the catastrophe bond market with what will be its eighth Mystic cat bond deal in late November.

Originally the target was for $125 million of property catastrophe reinsurance cover from the capital markets.

But the company raised its target last week for its latest cat bond deal and has now successfully secured that additional investor support.

As a result, the now $150 million Mystic Re 2023-1 catastrophe bond will offer Liberty Mutual collateralized reinsurance protection, on a per-occurrence and indemnity trigger basis, to provide additional reinsurance protection against losses from named storms and earthquakes affecting the US, Canada and the Caribbean, across a three-year term.

So, Mystic Re IV Ltd. will issue and sell to cat bond investors a single $150 million tranche of Series 2023-1 Class A notes, with the proceeds used to collateralize the underlying reinsurance agreement between the SPI and Liberty Mutual.

The $150 million of cat bond notes come with an initial attachment probability of 2.48%, an initial expected loss of 1.74% and were initially offered to investors with price guidance in a range from 8.5% to 9.25%.

As the coupon was priced at the top-end of that range, at 9.25%, this new Mystic Re IV cat bond will pay investors a multiple-at-market of 5.3 times the base expected loss.

It’s a significantly higher multiple paid than for Liberty Mutual’s June 2021 catastrophe bond issuance, but aligned with other recent deals brought to market in the fourth quarter of 2022.

Once this new cat bond has completed later this month, Liberty Mutual will have $750 million of catastrophe bonds outstanding that provide the company with reinsurance from the capital markets.

You can read all about this Mystic Re IV Ltd. (Series 2023-1) catastrophe bond from Liberty Mutual and every other cat bond issued in the Artemis Deal Directory.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.