According to Artemis’ sources, the price guidance has been raised for the first catastrophe bond to be sponsored by Inigo Insurance, the London headquartered and Lloyd’s market focused specialty insurance and reinsurance underwriter.
We’re told that the Montoya Re Ltd. (Series 2022-1) multi-peril catastrophe bond deal remains at $105 million in size for now.
But the pricing indication for the Montoya Re cat bond notes has now been elevated to a range running from the top-end of initial guidance.
As we explained earlier this month, Inigo Insurance had registered Montoya Re Ltd. as a special purpose insurer in Bermuda for the purpose of issuing catastrophe bonds and for its first issuance, Montoya Re was seeking to issue and sell to investors a $105 million or larger tranche of Series 2022-1 Class A notes.
The $105 million of Series 2022-1 Class A notes issued by Montoya Re Ltd. are designed to provide Inigo’s Lloyd’s syndicate 1301 with roughly three years of annual aggregate retrocessional reinsurance protection, to the end of March 2025, covering multiple international peak perils of U.S. named storm, U.S. and Canada earthquake, Japan earthquake, and Japan typhoon, using a PCS industry loss index trigger.
The Class A notes that Montoya Re aims to issue have an initial attachment probability of 3.37% and an initial expected loss of 1.52%.
The notes were at first offered to cat bond funds and investors with coupon price guidance in a range from 5.5% to 6.25%.
But it seems the pricing has been deemed not sufficient, as we’re now told that the notes are being offered with updated spread guidance that is now in a range from 6.25% to 6.75%.
That suggests this Montoya Re cat bond will at least price at the top-end of initial guidance, perhaps even a little higher.