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Spinnaker secures $110m debut Mountain Re cat bond with top-end pricing


Spinnaker Insurance Company has now secured $110 million of multi-year and collateralized reinsurance from the capital markets as its debut Mountain Re Ltd. (Series 2023-1) catastrophe bond issuance has now been priced.

spinnaker-insurance-logoThe size is slightly above the initial $100 million target that had been set by the personal and commercial lines program and fronting specialist that is owned by fast-growing insurtech Hippo Insurance.

But, at the same time is slightly upsizing, the pricing for Spinnaker’s debut cat bond has been finalised within the initial guidance, we’re told, albeit at the top-end.

Spinnaker ventured into the catastrophe bond market for its first time to sponsor this debut Mountain Re issuance towards the end of April.

Initially Spinnaker was seeking $100 million or more in US multi-peril collateralized reinsurance, but as we later reported the target size was lifted, with an issuance of up to $125 million anticipated.

We’re now told by sources that the deal will settle to provide Spinnaker $110 million of reinsurance, so slightly above the initial target size for this first Mountain Re cat bond.

So, the $110 million in notes to be issued will provide Spinnaker with a capital market-backed source of reinsurance against losses from a range of US catastrophe perils, being US named storm, earthquake, severe thunderstorm and winter storm events, with the coverage on on a per-occurrence and indemnity trigger basis over a three-year term, to June 5th 2026.

The now known to be $110 million of Series 2023-1 Class A cat bond notes that Mountain Re Ltd. will issue come with an initial base expected loss of 0.86%.

The notes were first offered with spread price guidance in a range from 6% to 6.75%, but that was subsequently fixed at the top-end of 6.75% and we’re told that this is where the notes have now been priced.

As we stated in our last article on the debut Mountain Re cat bond from Spinnaker, for a first-time sponsor to price its cat bond notes within the initial guidance can still be considered a strong result, even when at the upper-end.

Underscoring what should be considered healthy execution of the deal, is the fact the issuance has upsized slightly to provide Spinnaker $110 million of reinsurance.

You can read all about this new Mountain Re Ltd. (Series 2023-1) catastrophe bond, and view details of more than 900 other cat bond issuances, in the extensive Artemis Deal Directory.

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