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MTA secures $100m MetroCat Re cat bond at bottom of price guidance


New York transport operator the Metropolitan Transportation Authority (MTA) has now finalised its new catastrophe bond to provide an upsized $100 million in parametric storm surge protection, while the MetroCat Re Ltd. (Series 2023-1) notes have been priced at the bottom of guidance.

new-york-mta-logoThe New York Metropolitan Transportation Authority (MTA) returned to the catastrophe bond market at the start of May, seeking a renewal of a maturing cat bond.

This new issuance becomes the fourth MetroCat Re issuance from the transportation organisation that we’ve recorded in our Deal Directory.

The transportation organisation was originally seeking seeking $75 million or more in parametric named storm induced storm surge protection from the capital markets, through a renewal cat bond issued by its Bermuda based SPI structure, MetroCat Re Ltd.

The notes offered will be sold to investors and the proceeds of that sale used to fully collateralize an underlying reinsurance agreement between the issuing SPI vehicle, MetroCat Re, and the New York MTA’s captive insurer First Mutual Transportation Assurance Co.

The captive insurer will in turn provide storm surge insurance protection on a parametric basis directly to the MTA.

The cat bond will provide the MTA with New York area storm surge insurance protection on a parametric and per-occurrence basis over an almost three-year term, being on-risk until the end of April 2026.

As we then reported earlier this week, the target size for the MetroCat Re 2023-1 cat bond was raised, with between $75 million and $100 million of parametric storm surge protection sought.

At that time the price guidance was also lowered and narrowed.

The Metro Cat Re 2023-1 Class A notes have an initial base expected loss of 1.337% and were first offered to investors with price guidance in a range from 5.75% to 6.25%.

That spread guidance was then narrowed towards the lower-end of the range, at a revised 5.75% to 6%.

We’re now told that the pricing has been finalised at the low-end of 5.75%.

Reflecting a strong result for the sponsor of this cat bond, with more protection than initially targeted now secured, at the lowest end of price guidance.

You can read all about the New York MTA’s new MetroCat Re Ltd. (Series 2023-1) catastrophe bond transaction and every other cat bond ever issued in the Artemis Deal Directory.

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