The latest catastrophe bond to be sponsored by French reinsurance company SCOR has now been priced at the lower-end of the raised coupon guidance range, at the upsized amount of $250 million.
As we explained last week, the multi-peril Atlas Capital UK 2019 PLC (Series 2019-1) catastrophe bond transaction grew significantly in size, from its $175 million target by 43% to reach $250 million thanks to investor demand.
It is the second catastrophe bond from SCOR to use the UK’s recently introduced insurance-linked securities (ILS) regulatory regime, but it falls slightly smaller than the French reinsurance firm’s first $300 million Atlas Capital UK cat bond that was issued in 2018.
At the same time as this 2019 Atlas Capital UK cat bond grew in size, the price guidance was raised as investors demanded a higher return for the risks they would be taking on.
The annual aggregate retrocessional reinsurance protection that this new Atlas Capital UK 2019 cat bond will provide SCOR with covers it against certain losses from U.S. named storm risks, including Puerto Rico and the U.S. Virgin Islands, U.S. and Canada earthquake risks, and European windstorm risks.
Coverage is on a regionally weighted industry loss index trigger basis, provided by PCS and PERILS, with an index deductible, per-event, for each of the perils.
The now $250 million of notes being issued, which have an initial expected loss of 5.46%, were initially offered to investors with price guidance from 11.25% to 12%, but it then tightened towards the upper-end of the range, at 11.75% to 12%, as we explained last week.
Now, sources tell us that the pricing has been fixed at the lower-end of that revised guidance, so the $250 million of notes being issued by Atlas Capital UK 2019 will pay investors an 11.75% coupon.
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