French reinsurance firm SCOR has seen its latest catastrophe bond, Atlas IX Capital DAC (Series 2016-1), grow by 20% during marketing to reach $300 million in size, while at the same time the pricing has been moved to the top end of initial spread guidance.
With the Atlas IX Capital 2016-1 catastrophe bond SCOR is seeking a fully collateralized four-year source of retrocessional reinsurance protection against certain losses from U.S. named storms and U.S. and Canadian earthquakes to the end of 2019.
At launch, earlier in December, SCOR’s Atlas IX Capital 2016-1 cat bond was $250 million in size, but we understand that demand has helped to lift that figure by 20% to $300 million during the marketing period.
At that size the Atlas IX Capital 2016-1 cat bond, the reinsurance firms thirteenth cat bond which we have listed in our Deal Directory, could be SCOR’s second largest issuance ever.
At the same time as upsizing, the price guidance on SCOR’s latest catastrophe bond has been moved to the upper end of the initial range.
When the cat bond was launched to the ILS investor community it had an initial price guidance range of 7% to 7.5%. We understand that the transaction is now looking set to be priced today at the top end of that guidance, at 7.5%.
With the Atlas IX Capital 2016-1 cat bond having an initial expected loss of 3% at the base case, or 3.29% at a warm sea surface temperature sensitivity case, the 7.5% spread would offer investors a multiple of 2.5 times the base case EL or 2.28 times the sensitivity case.
SCOR’s latest cat bond is scheduled for pricing today, we understand, but will not complete until the second week of January so will not count towards the 2015 issuance total.