Texas FAIR Plan’s $200m Bluebonnet Re 2025-2 cat bond price moves to upper-end

The first catastrophe bond for the Texas FAIR Plan Association (TFPA) has seen its price guidance moved to the upper-end of the initial range, while the target remains to secure $200 million of multi-peril reinsurance from the capital markets through this Bluebonnet Re Ltd. (Series 2025-2) issuance.

The size target remains unchanged from the original when it was launched back at the middle of April at $200 million, we are told, for this first cat bond to protect the Texas FAIR Plan Association (TFPA).

The Texas FAIR Plan was set up in 1995 to provide coverage to residential properties that are denied by other insurance carriers and it is managed by the Texas Windstorm Insurance Association (TWIA).

The goal remains to secure $200 million in multi-year and fully-collateralized reinsurance from the capital markets to protect the TFPA against losses from named storms, severe thunderstorms and wildfires in the State of Texas on an indemnity trigger and per-occurrence basis, running across a two-year term to early June 2027.

The $200 million of Bluebonnet Re Series 2025-2 Class A catastrophe bond notes come with an initial expected loss of 4.07% and were at first being offered to catastrophe bond funds and investors with spread price guidance in a range from 11% to 12%.

We’re now told that the price guidance has been revised and fixed at the upper-end, for a spread of 12% to be paid.

So it appears that the Texas FAIR Plan will benefit from the initially targeted $200 million of reinsurance protection from this first catastrophe bond to protect the Association, while pricing looks set to be within guidance, albeit it likely at the upper-end of the initial range.

Remember that this Bluebonnet Re 2025-2 cat bond for the TFPA is in the market at the same time as a Bluebonnet Re 2025-1 issuance for its manager, the Texas Windstorm Insurance Association (TWIA).

Read all about this new Bluebonnet Re Ltd. (Series 2025-2) catastrophe bond for the Texas FAIR Plan Association and every other cat bond transaction in the Artemis Deal Directory.