Louisiana Citizens Property Insurance Corporation continues to target $150 million of named storm reinsurance from its twelfth catastrophe bond sponsorship, while the price guidance for the Bayou Re Ltd. (Series 2026-1) notes that are being offered has been lowered slightly, Artemis has learned.
Returning earlier this month with this Bayou Re 2026-1 catastrophe bond deal, it marked the seventh year in a row that Louisiana Citizens has sought to sponsor a new cat bond.
The initial target was to secure $150 million of multi-year named storm reinsurance protection to cover losses in its state of operation.
We’re now told that the target has so far not changed, with still $150 million being targeted.
Louisiana Citizens currently has $750 million of cat bond protection outstanding, according to our leaderboard, but with $195 million of that from a 2023-1 issuance scheduled to mature prior to hurricane season this year it remains uncertain whether the insurer of last resort could enter the season with less cat bond protection in-force.
Read about all of Louisiana Citizens’ catastrophe bond sponsorships in our Deal Directory.
While the target remains for Bayou Re Ltd. to offer and sell a $150 million single Class A tranche of Series 2026-1 notes to investors, we’re now told the price guidance for the risk interest spread the notes will pay has been lowered slightly.
These Bayou Re Series 2026-1 cat bond notes will provide Louisiana Citizens with a capital markets backed and collateralized source of reinsurance against named storm losses on an indemnity trigger and per-occurrence basis, across a three-year term to the end of April 2029.
The still $150 million of Series 2026-1 Class A cat bond notes that Bayou Re Ltd. is offering come with an initial base expected loss of 2.5% and were initially offered to cat bond funds and investors with price guidance in a range from 6.75% to 7.25%.
Sources have told us the price guidance has been updated to a slightly lower range of 6.5% to 7% at this time.
It will be interesting to see whether the issuance could get upsized, if Louisiana Citizens can secure the coverage at what it deems attractive pricing terms.
You can read all about this new Bayou Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond issued in our extensive Artemis Deal Directory.
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