Tokio Marine targets below guidance pricing for Kizuna Re quake cat bond

Tokio Marine & Nichido Fire Insurance Co. Ltd., the giant Japanese primary insurance group, is the latest sponsor to target below guidance pricing for its new catastrophe bond, with the still $100 million Kizuna Re III Pte. Ltd. (Series 2024-1) transaction seeing its spread guidance reduced.

As we reported last month, this is the ninth catastrophe bond we have listed in our extensive Deal Directory that will benefit part of the Tokio Marine Holdings group of companies and now the sixth in the Kizuna Re series of cat bond deals.

The Japanese insurance carrier is again sponsoring its Kizuna Re catastrophe bond issuance out of Singapore, the second time it has used that country as issuing domicile.

Through this Kizuna Re III Pte. Ltd. Series 2024-1 catastrophe bond, Tokio Marine & Nichido Fire Insurance will benefit from a three-year rolling aggregate and indemnity trigger based source of collateralized earthquake reinsurance protection, across a five year term.

We’re told the target size for the issuance has not been updated yet, with still $100 million of notes said offered.

But, the sponsor is targeting much keener pricing. The $100 million of Series 2024-1 Class A cat bond notes that Kizuna Re III Pte. Ltd. will issue and have an initial expected loss of 1.59% on a three-year basis (0.53% annualised), were originally offered to catastrophe bond investors with pricing guidance of 2.75% to 3.25%, but are now being offered with updated and reduced price guidance of 2.5% to 2.75%, we are told.

So it appears the sponsor is hoping to price its latest cat bond at, or below, the low end of initial price guidance.

It’s worth noting that the multiple-at-market is lower than the 2021 Kizuna earthquake cat bond from Tokio Marine, which had an initial annualised expected loss of 0.33% and priced to pay investors a 2% spread.

You can read all about this new Kizuna Re III Pte. Ltd. (Series 2024-1) catastrophe bond transaction and every other Tokio Marine sponsored cat bond in our Artemis Deal Directory.