The Hartford gets $200m Foundation Re IV cat bond priced below mid-point

The Hartford, a US primary property and casualty insurer, has now secured its targeted $200 million of multi-peril catastrophe reinsurance from its new Foundation Re IV Ltd. (Series 2023-1) catastrophe bond, while the notes were eventually priced below the initial mid-point of guidance.

The Hartford had previously sponsored a string of Foundation Re cat bond deals from 2004 up to the last which we covered back in 2011, all through its Hartford Fire Insurance entity.

The insurer returned to the catastrophe bond market in search of fully-collateralized peak peril catastrophe reinsurance protection on a multi-year basis, earlier this month.

The target was for The Hartford to secure a $200 million source of collateralized US named storm and earthquake reinsurance protection, across a three calendar year term running the the end of 2026, on an indemnity trigger and per-occurrence basis with this Foundation Re IV 2023-1 cat bond.

That size target remained unchanged and we’re now told the notes have priced, meaning the $200 million of reinsurance is all but assured from this new cat bond for The Hartford.

The now confirmed as $200 million of Series 2023-1 Class A notes that Foundation Re IV Ltd. will issue, come with an initial expected loss of 1.36% and were at first offered to cat bond investors with spread price guidance in a range from 6% to 6.75%.

As we reported in our update yesterday, that spread guidance was narrowed to a range of 6.25% to 6.5%.

Now, we’re told that the Foundation Re IV 2023-1 Class A notes have been successfully priced for The Hartford, with the spread finalised to pay investors 6.25%.

So that pricing is well within the initial guidance range and has been finalised in the lower-half of guidance, meaning The Hartford secured the targeted $200 million in reinsurance it had been seeking from the capital markets with its first catastrophe bond since 2011 at what will be deemed attractive pricing and with strong execution.

You can read all about this new Foundation Re IV Ltd. (Series 2023-1) cat bond transaction in our Deal Directory, where you can analyse details of almost every catastrophe bond ever issued.