Selective lifts debut High Point Re cat bond target to as much as $325m

Selective Insurance, the US property and casualty insurer, appears set to upsize its debut catastrophe bond issuance by at least 50%, with the target increased from $200 million to now up to $325 million in reinsurance being sought from the High Point Re Ltd. (Series 2023-1) deal.

Selective entered the catastrophe bond market for the first time at the beginning of the month, with an initial target to secure $200 million or more in multi-peril collateralized reinsurance capacity from the capital markets with this High Point Re 2023-1 cat bond.

We’re now told that the target size has been increased significantly, with the deal’s proposed size now lifted to between $300 million and $325 million.

With this High Point Re Ltd. cat bond, Selective is seeking a three year source of reinsurance against losses from U.S. named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impacts and volcanic eruptions, all on an indemnity and per-occurrence basis, US wide but excluding the key cat exposed states of California, Florida, Louisiana and Texas.

The now up to $325 million of High Point Re Series 2023-1 Class A cat bond notes have an initial base expected loss of 0.77% and were first offered to investors with spread price guidance in a range from 5% to 5.75%.

Sources said that the price guidance the enlarged tranche of notes are being offered with, has now been fixed at the top-end of that range, for a spread of 5.75% to be paid to investors.

At which level this would be considered a strong showing for Selective, for its first visit to the catastrophe bond market.

To secure at least 50% more in reinsurance, at pricing within the initial guidance range, will be encouraging for a new sponsor and as a result the capital markets look set to take on an enlarged slice of Selective’s reinsurance program, while the capacity will help the insurer to continue on its growth path as well.

You can read all about this new High Point Re Ltd. (Series 2023-1) catastrophe bond and every cat bond deal ever issued in our Artemis Deal Directory.