The Hartford secures $270m Foundation Re IV 2026-1 cat bond priced below guidance

The Hartford has now successfully secured its targeted $270 million of multi-peril collateralized catastrophe reinsurance protection from the capital markets through the Foundation Re IV Ltd. (Series 2026-1) catastrophe bond, with the notes pricing below the initial guidance, Artemis understands.

US primary property and casualty insurer The Hartford returned to the catastrophe bond market for its second takedown under the Bermuda-based special purpose insurer (SPI) Foundation Re IV Ltd. last month.

The initial target was to secure $270 million of catastrophe reinsurance from the capital markets and that did not change, as the insurer seemingly prioritised securing the deal at the most efficient pricing possible.

As we reported in an update on this deal, the price guidance for the Foundation Re IV 2026-1 cat bond notes was lowered during the marketing phase of the issuance, as investors demonstrate their appetite for risk from respected sponsors.

Now, we’ve learned that the notes have been priced and as a result The Hartford is set to secure its targeted reinsurance at attractive pricing.

This new cat bond will now become the seventh to be sponsored by The Hartford, since it brought to market the first in its series of Foundation Re cat bond deals back in 2004.

You can read about every Foundation Re catastrophe bond from The Hartford in our extensive Deal Directory.

With the notes now priced, Foundation Re IV Ltd. will issue the targeted single tranche of $270 million Series 2026-1 Class A notes that will provide The Hartford with a source of collateralized US named storm and earthquake protection, including for D.C. and Puerto Rico, across a four calendar year term running to the end of 2029 on an indemnity trigger and per-occurrence basis.

The $270 million of Series 2026-1 Class A notes that Foundation Re IV Ltd. will issue come with an initial base expected loss of 1.18%.

The notes were initially offered to cat bond investors for a spread of between 3.75% to 4.25%, which was then lowered to a revised spread range of between 3.25% and 3.75%.

Now, we’re told the $270 million of Series 2026-1 Class A notes that Foundation Re IV Ltd. will issue have been priced to pay investors an initial risk interest spread of 3.5%, so below the initial guidance range.

This new $270 million of cat bond protection will now run alongside the $200 million of multi-peril catastrophe reinsurance from the Foundation Re IV 2023-1 catastrophe bond that protection remains in-force until the end of 2026.

So it is encouraging to see The Hartford growing its cat bond sourced reinsurance and staggering maturities of the notes, given the insurer had previously remained absent from the market since 2011.

As a reminder, you can read all about this new Foundation Re IV Ltd. (Series 2026-1) cat bond transaction from The Hartford and view details of almost every catastrophe bond ever issued in our extensive Deal Directory.