The new Ocelot Re Ltd. (Series 2025-1) catastrophe bond transaction that is being sponsored by Hiscox Group has seen its price guidance dropped during the marketing phase of the issuance, as investors demonstrate their appetite for risk from respected sponsors.
The size of the issuance hasn’t changed though, and Hiscox Group continues to seek a $200 million source of retrocessional North American peak peril reinsurance protection from the capital markets with this Ocelot Re 2025-1 cat bond issuance.
As we reported in late January, Hiscox Group returned to the catastrophe bond market for its second takedown under the Ocelot Re Ltd. special purpose insurer (SPI).
Just over one year ago, Hiscox secured $125 million in peak peril aggregate retrocessional reinsurance cover from an Ocelot Re Ltd. (Series 2023-1) cat bond issuance.
Ocelot Re Ltd. is still seeking to issue two tranches of Series 2025-1 notes, that are designed to provide Hiscox with a $200 million multi-year source of US and Canada named storm and earthquake retrocession, the size of the notes has not changed.
One tranche of this Ocelot Re 2025-1 cat bond will be structured to provide annual aggregate and weighted PCS industry-loss trigger based coverage, while the second will provide industry-loss index trigger second and subsequent event occurrence protection.
The $150 million tranche of Class A notes will provide the annual aggregate protection and have an initial attachment probability of 1.73%, an initial expected loss of 1.35% and were first offered to investors with price guidance for a spread of between 4.25% and 4.75%, That price guidance has now dropped with a new tighter range of 4.25% to 4.5%.
The $50 million tranche of Class B notes will provide second and subsequent event occurrence based protection and have an initial attachment probability of 2.55%, an initial expected loss of 1.89%, and were first being offered to investors with price guidance for a spread of between 6.5% and 7.25%. That price guidance has also dropped, with a new tighter range of 6.25% to 6.5%.
Hiscox looks set to secure its latest cat bond at attractive pricing levels, with the market still executing keenly on price to provide significant value to sponsors.
As a reminder, you can read all about this Ocelot Re Ltd. (Series 2025-1) catastrophe bond from Hiscox and every other cat bond issuance in our extensive Artemis Deal Directory.
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