Tokio Marine targets mid-guidance pricing for $100m Kizuna Re quake cat bond

Tokio Marine & Nichido Fire Insurance Co. Ltd. is now targeting mid-guidance pricing for the $100 million of multi-year collateralized earthquake reinsurance protection it aims to secure from its new Kizuna Re III Pte. Ltd. (Series 2026-1) catastrophe bond transaction, Artemis has learned.

The company returned to the catastrophe bond market recently for what will become the tenth catastrophe bond we feature in our extensive Deal Directory that will provide reinsurance to part of the Tokio Marine Holdings group of companies and now the seventh in the Kizuna Re series of cat bond deals.

Initially, the target was to secure $100 million of collateralized earthquake reinsurance from this new Kizuna Re III cat bond for the sponsor.

We’re now told that target size has not changed so far for this issuance, but that the price guidance has been updated at the mid-point of the range of spreads that was initially being offered.

Recall that this will be the third Tokio Marine cat bond to use a special purpose reinsurance vehicle domiciled in Singapore.

Kizuna Re III Pte. Ltd. is still offering $100 million of Series 2026-1 Class A notes that will provide Tokio Marine with capital markets backed reinsurance against Japanese earthquake loss events, structure on a three-year rolling aggregate and indemnity trigger basis, across a five year term.

The $100 million of Series 2026-1 Class A cat bond notes that Kizuna Re III Pte. Ltd. is offering come with an initial expected loss of 2.36% on a three-year basis (0.79% annualised), and were first offered to catastrophe bond investors with pricing guidance of 2.25% to 2.75%.

We’re now told the price guidance has been updated at the mid-point of that range, for a spread of 2.5% to be offered.

Which is still lower pricing compared to the 2024-1 Kizuna Re quake cat bond from Tokio Marine, which had an initial annualised expected loss of 0.53% and priced to pay investors an initial 2.75% spread.

You can read all about this new Kizuna Re III Pte. Ltd. (Series 2026-1) catastrophe bond transaction and every other Tokio Marine sponsored cat bond in our Artemis Deal Directory.