TransRe’s Bowline Re cat bond settles at $250m with mid-point pricing


Transatlantic Holdings, the parent to Transatlantic Reinsurance (or TransRe), first catastrophe bond has now been priced and the reinsurer has secured a $250 million source of collateralized multi-peril and multi-year retrocession with pricing that was fixed at the middle of initial guidance.

Originally, TransRe’s first foray in the catastrophe bond market was a $200 million Bowline Re 2018-1 transaction, issued through a newly registered Bermuda special purpose insurer (SPI) called Bowline Re Ltd.

TransRe was hoping to see a single $200 million tranche of Series 2018-1 Class A notes issued, with their funding proceeds used to collateralize underlying retrocessional reinsurance agreements between Bowline Re and TransRe’s companies.

Investor demand helped the reinsurer to increase the size of its debut cat bond to $250 million.

The notes will provide $250 million of reinsurance protection to Transatlantic Reinsurance Company as well as named subsidiaries TransRe London, TransRe Zurich, Fair American Insurance and Reinsurance Company and Fair American Select.

The four years of retro reinsurance protection will cover the firms against losses from named storms, earthquakes and severe thunderstorms across the United States, Puerto Rico, Canada, the U.S. Virgin Islands and District of Columbia, on an annual aggregate and weighted industry loss basis.

At launch, the Bowline Re 2018-1 Class A notes, with an initial expected loss of 1.6%, were offered to cat bond investors with coupon price guidance in a range from 4.25% to 4.75%.

The pricing has now been fixed at the middle of that initial range, so the Bowline Re 2018-1 cat bond will pay investors a 4.5% coupon.

The transaction will come into force next week, an early slice of its renewal. As a first time experience of the catastrophe bond market, TransRe’s debut will be an encouraging one for the reinsurer, with a larger than initially planned slice of its retrocession now set to be supplied through Bowline Re at the middle of its pricing expectations.

You can read all about TransRe’s Bowline Re Ltd. (Series 2018-1) catastrophe bond and every cat bond transaction since the market’s inception in the Artemis Deal Directory.

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