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Long Point Re III 2015 cat bond set to upsize, price guidance narrows


U.S. primary insurer Travelers’ latest catastrophe bond transaction, Long Point Re III Ltd. (Series 2015-1), is set to upsize to as much as $300m, according to sources, while the price guidance has been narrowed towards the upper end of the range.

Travelers latest cat bond, which is its fifth issuance, launched almost a fortnight ago. With the Long Point Re III 2015-1 deal Travelers is seeking a fully-collateralized source of reinsurance protection for multiple U.S. perils (tropical cyclones, earthquakes, severe thunderstorms and winter storms) over a three-year term.

The transaction launched with a single tranche of Series 2015-1 Class A notes at a preliminary size of $200m. The latest marketing information now shows the tranche sized at $200m to $300m, according to sources, suggesting that the cat bond is likely to upsize.

At the same time the price guidance has been narrowed, from the launch range of 3.5% to 4%, towards the upper end of that guidance with a new range of 3.75% to 4%.

So it looks likely that the Long Point Re III 2015 cat bond will grow in size while pricing looks set to settle at or above the mid-point of guidance.

The majority of recent catastrophe bonds have seen pricing settle towards the higher ends of guidance, further demonstrating ILS investors lack of appetite to keep driving pricing down. The so-called floor on ILS and cat bond pricing certainly seems to be making itself more evident through the first-half of 2015.

The Long Point Re III Ltd. (Series 2015-1) catastrophe bond is expected to price later this week and settle the week after. We’ll update you as it completes and you can read all about it and every other cat bond in the Artemis Deal Directory.

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