In what must be one of the fastest marketing periods for a new catastrophe bond, Swiss Re’s Mythen Re Ltd. (Series 2013-1), which only launched on Monday was priced yesterday and the cat bond will settle on Tuesday of next week. This perhaps shows the sponsors confidence in being able to gain investor interest much more rapidly in the current market.
Mythen Re 2013-1 will provide Swiss Re with a source of fully-collateralized retrocessional reinsurance protection over a two-year risk period. Protection is for Atlantic hurricanes for all the usual hurricane exposed U.S. coastal states from the Gulf coast round to the north-east. Protection is on a per-occurrence basis using a PCS industry loss index trigger. The deal covers both personal and commercial property industry losses reported by PCS.
Mythen Re 2013-1 launched with a single tranche of Class B-1 notes which were sized at $75m. At pricing yesterday we understand the deal had grown in size to $100m, a 33% increase. At the same time the pricing was fixed at the lower end of the launch range, having launched with coupon guidance of 8% to 8.25%, finishing at 8%.
Typically cat bonds can be in the market for anything up to three or even four weeks, between the time they launch and the time of final settlement. In this case it will be eight days. It is encouraging for sponsors that the ILS investor market is ready to accept such rapid marketing of deals and as the investor side of the market continues to develop we may see this trend continue with shorter bookrunning periods.
This is the third Swiss Re sponsored cat bond featuring the Mythen name. You can read about the earlier Mythen catastrophe bonds here: