RenaissanceRe has now secured its 67% upsized new Mona Lisa Re Ltd. (Series 2021-1) catastrophe bond transaction at $250 million in size, while the coupon has now been fixed at the lowest-end of reduced price guidance.
Bermuda-headquartered global reinsurance company RenaissanceRe (RenRe) returned to the catastrophe bond market with its latest transaction earlier this month, with a Mona Lisa Re issue aiming to offer a $150 million single tranche of notes to cat bond investors.
With cat bond market conditions strong and capacity among cat bond investors and funds increasing, RenRe benefited from this and managed to secure its latest cat bond some 67% larger, as a $250 million issuance.
At the same time, RenRe has secured the $250 million of retrocessional catastrophe reinsurance protection at keen pricing, with the notes now having their coupon fixed at the bottom-end of guidance, sources explained.
So, the Mona Lisa Re 2021-1 cat bond will provide $250 million of collateralized retrocessional reinsurance cover to RenRe and its also to its DaVinci Re Ltd. vehicle, the third-party capital backed equity-based joint-venture reinsurer operated by the company.
RenRe, DaVinci Re and affiliates will benefit from $250 million of retro reinsurance across a four year term, protecting them against losses from U.S., Puerto Rico, U.S. Virgin Islands and D.C. named storms and earthquakes, as well as Canada earthquakes, on an industry loss trigger and annual aggregate basis.
The $250 million of Series 2021-1 Class A notes to be issued by Mona Lisa Re will have an initial expected loss of 3.71%.
At launch, the notes were marketed to cat bond investors with coupon spread guidance of 7.5% to 8.25%.
That spread guidance was subsequently reduced, thanks to investor demand, to a revised and lowered range of 7% to 7.5%.
Now, we’re told that the coupon has been fixed for this issuance at the lowest-end of the reduced range, at 7%, which represents a roughly 11% drop in price from the initial guidance mid-point, another cat bond exhibiting strong execution and delivering a good result for its sponsor.