Security First targets $100m First Coast Re III Singapore-based cat bond

Florida headquartered Security First Insurance Company is back in the catastrophe bond market, sponsoring a $100 million First Coast Re III Pte. Ltd. (Series 2021-1) transaction, that will be its fourth cat bond issuance, its second cat bond to be issued out of Singapore.

The Floridian insurance carrier has returned to the capital markets to add more fully-collateralized multi-peril reinsurance capacity with the assistance of global reinsurer Swiss Re.

Swiss Re acts as a ceding reinsurer and therefore a conduit between Security First Insurance and the cat bond and insurance-linked securities (ILS) investors that will back this deal.

In addition, Swiss Re’s Capital Markets team is also acting as sole structuring agent and bookrunner for the First Coast Re III Pte cat bond issuance, our sources said.

Security First was last in the cat bond market in 2019, when it secured a four-year slice of named storm and severe thunderstorm protection from the First Coast Re II Pte. Ltd. (Series 2019-1) transaction.

The insurer has registered a new Singapore based special purpose reinsurance vehicle for its fourth cat bond, with First Coast Re III Pte. Ltd. set to issue a single Class A tranche of Series 2021-1 notes.

The current target is for a $100 million tranche of Class A notes to be issued, with the notes set to be sold to investors and the proceeds used to collateralize retrocession agreements between Swiss Re and First Coast Re III Pte, which Swiss Re will then pass on the reinsurance cover to Security First.

We’re told the $100 million of Class A Series 2021-1 notes to be issued by First Coast Re III Pte will be exposed to Florida named storms and severe thunderstorms, across an almost four year term.

Coverage is slated to begin from June 1st 2021 and run through the end of March 2025, giving the cat bond an almost four year term. Protection will be on an indemnity trigger and cascading, per-occurrence basis, we’re told.

We understand the $100 million of Class A notes have an initial expected loss of 1.86% and that the notes are being offered to cat bond investors with coupon guidance in a range from 6.75% to 7.5%.

You can read all about the First Coast Re III Pte. Ltd. (Series 2021-1) transaction and over 700 other insurance-linked securities (ILS) transactions in the Artemis Deal Directory.