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The Hanover lifts Commonwealth Re cat bond target to $150m, pricing narrows


US primary insurer The Hanover Insurance Group, Inc. has lifted the target for its new Commonwealth Re Ltd. (Series 2023-1) catastrophe bond to $150 million, while at the same time the price guidance range has been narrowed, we understand.

hanover-insurance-group-logoThe Hanover recently returned to the catastrophe bond market for its second time, looking to expand the multi-year capital markets funding it benefits from within its catastrophe reinsurance arrangements.

Initially the insurer was seeking $125 million or more in US Northeast named storm reinsurance protection from this Commonwealth Re 2023-1 cat bond deal.

But we’re told that the target has been increased, with a now $150 million issuance of notes anticipated.

Meaning the deal aims to now provide The Hanover with $150 million in per-occurrence Northeast US named storm reinsurance protection from the capital markets, on a multi-year and fully-collateralized basis, using an indemnity trigger, running over a three year term running to maturity at July 8th 2026.

The now $150 million of Class A cat bond notes being issued have an initial base expected loss of 0.57% and were first offered to investors with spread price guidance in a range from 4% to 4.5%.

That price guidance range has now been narrowed to between 4% and 4.25%, we’re told.

You can read all about this Commonwealth Re Ltd. (Series 2023-1) catastrophe bond from The Hanover and every cat bond transaction ever issued in the extensive Artemis Deal Directory.

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