NC Farm Bureau gets Blue Ridge Re cat bond at raised $400m target

The North Carolina Farm Bureau has now secured and priced its debut Blue Ridge Re Ltd. (Series 2023-1) catastrophe bond issuance at the upsized target size of $400 million, while the notes have been priced within the initial guidance range.

It’s a good result for a first time sponsor and sees the NC Farm Bureau bringing the capital markets into its reinsurance tower in a securitized 144a cat bond format for the first time and at the raised size of $400 million, at some scale as well.

This Blue Ridge Re catastrophe bond will now provide the non-profit farm organisation and insurer with a capital markets backed source of multi-year reinsurance against named storm losses in its state of North Carolina.

At launch, the NC Farm Bureau was seeking to secure $250 million of named storm reinsurance, on an indemnity trigger and per-occurrence basis, across three full calendar years from January 1st 2024.

As we reported yesterday, the target size for this cat bond deal was updated to $400 million, so a significant increase in the amount of reinsurance being sought by the NC Farm Bureau.

Now, the notes have been priced and the spreads finalised within the initial guidance, while both tranches remained at their raised $200 million in size, we understand.

The lower risk tranche of Series 2023-1 Class A notes have an initial expected loss of 0.98% and were first offered with price guidance for a 5% to 5.5% spread, which was then updated to a range of 5.25% to 5.5%, and we’re now told have been finalised at the original mid-point, to pay investors a spread of 5.25%.

The riskier Class B tranche of notes have an initial expected loss of 1.91% and were originally offered with price guidance ranging from a 7.5% to 8% spread, which was then fixed at 8% and this is where the notes have now been priced, so again this is within the original guidance, albeit at the top-end of it.

It’s good to see another first-time catastrophe bond sponsor maximising its opportunity to secure more than the targeted reinsurance with its debut issuance and securing that coverage within the initial pricing expectations as well.

You can read all about this new Blue Ridge Re Ltd. (Series 2023-1)  catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.