NCJUA lifts Longleaf Pine Re cat bond target to $140m, as price elevates

The North Carolina Joint Underwriting Association (NCJUA) has raised the target for its first catastrophe bond since 2013, now seeking up to $140 million in aggregate named storm reinsurance from this Longleaf Pine Re Ltd. (Series 2024-1) issuance, but with the pricing set to be at the top-end of guidance or higher.

Price conditions in the catastrophe bond market have adjusted in recent weeks, especially for aggregate and index deals where a floor seems to have been reached, with investors holding the line or demanding higher rates, something that has translated across both primary and secondary markets.

This Longleaf Pine Re deal from the NCJUA is just the latest to price higher, reflecting the fact cat bond investors have reached the end of their appetite to soften pricing, it now appears.

The North Carolina Joint Underwriting Association (NCJUA) is also also known as the FAIR (Fair Access to Insurance Requirements) Plan. It is a tax exempt association of insurance companies that are licensed to write and engage in writing property insurance coverage in the state of North Carolina.

Through Longleaf Pine Re Ltd., the NCJUA was initially seeking at least $125 million in protection against named storm losses in its home state, on an indemnity trigger and annual aggregate basis.

Now, we’re told the target has been increased slightly, with up to $140 million in reinsurance being sought by the NCJUA.

The now up to $140 million of Longleaf Pine Re 2024-1 cat bond notes come with an initial expected loss of 5.68% and were at first offered to cat bond investors with price guidance in a range from 15% to 17%.

We’re now told by sources that the price guidance has been elevated, with the notes offered with a range of spreads from 17% to 17.5%, so pricing looks set for the top-end of initial guidance or even higher.

Clearly here, the market is making its appetite for aggregate risk at this expected loss level known and the desire to install a new floor on spread pricing, which is particularly clear given the wide initial price guidance range that had been offered.

But there is also a widening effect ongoing across the cat bond market, which has resulted in wider spreads in the secondary market and this has also translated to higher pricing of some new issues as well.

You can read all about this new Longleaf Pine Re Ltd. (Series 2024-1) catastrophe bond and every other cat bond issued in the extensive Artemis Deal Directory.