The first catastrophe bond that will benefit reinsurance firm Ariel Re’s Lloyd’s of London Syndicate 1910 looks set to see its pricing fall by roughly 10%, as the marketed spreads dropped on the Titania Re Ltd. (Series 2021-1) retro cat bond.
Ariel Re entered the catastrophe bond market with its first transaction towards the end of May, with the Titania Re deal seeking $150 million of a multi-year retrocessional reinsurance cover against certain losses from U.S., Puerto Rico, U.S. Virgin Islands, D.C. and Canada named storms and earthquakes for the company.
The retrocessional reinsurance and industry loss based protection will run across a three year period, to June 2024.
The cat bond will provide Ariel Re’s Syndicate 1910 with annual aggregate protection, attaching at an index loss level of $1 billion and covering up to $1.33 billion, after a $45 million per-event deductible.
At launch, the $150 million of Series 2021-1 Class A notes being issued by Titania Re Ltd, which have an initial expected loss of 1.98%, were offered to investors with coupon price guidance in a range from 5% to 5.5%.
Now, we’re told by sources that the spread guidance on offer has been updated at a lower level, of 4.5% to 5%, which implies a possible 10% price drop from the initial spread midpoint, to the middle of this newly updated range.
You can read all about this first catastrophe bond from Ariel Re, the currently $150 million Titania Re Ltd. (Series 2021-1), as well as every other cat bond ever issued in the Artemis Deal Directory.