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.
The 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.