Sompo Int. targets upsized $150m Sakura Re 2022 cat bond at top-end pricing

Sompo International, the global P&C insurance and reinsurance arm of Sompo Holdings, is aiming to upsize its new Sakura Re Ltd. (Series 2022-1) catastrophe bond by as much as 50%, with the target now being for up to $150 million of notes to be issued.

At the same time though, the price guidance for the notes Sakura Re Ltd. will issue has risen to the top-end of initial guidance, we understand.

This second Sakura Re catastrophe bond was launched to investors earlier this month, with a $100 million target.

It will be, once issued, the first catastrophe bond to solely benefit Sompo International, as the previous Sakura had provided reinsurance to the Japanese insurance entities of Sompo Holdings as well as the SI unit.

This Sakura Re 2022-1 cat bond will provide Sompo International with US and Canadian specific property catastrophe reinsurance coverage, against losses from named storms and earthquakes.

It features a dual trigger, to provide Sompo International with per-occurrence retro reinsurance protection for earthquake risks and annual aggregate for named storms.

The deal launched offering a $100 million tranche of Class A notes to investors, featuring a PCS industry loss index trigger and to provide retrocessional reinsurance protection across a three-year term, over three annual risk periods, to almost the end of 2025.

We’re now told that target size for this cat bond issuance has been lifted, with the Class A tranche now slated to be up to $150 million in size, so a possible 50% upsizing.

The notes come with an initial attachment probability of 3.73%, an initial base expected loss of 2.96% and were initially offered to cat bond investors with price guidance in a range from 12.5% to 13.5%.

We’re now told that the coupon has been raised to the top-end of that guidance, at 13.5%, at which level this deal would pay investors a multiple of almost 4.6 times the expected loss.

You can read all about this new Sakura Re Ltd. (Series 2022-1) catastrophe bond from Sompo and every other cat bond deal in our extensive Artemis Deal Directory.