Universal’s Cosaint Re cat bond target lifted to $150m, while pricing drops

Share

The first catastrophe bond to be sponsored by Florida headquartered insurer Universal Insurance Holdings looks likely to upsize with the target now lifted by 50% to $150 million, while at the same time the price guidance for the Cosaint Re Pte. Ltd. (Series 2021-1) transaction has been lowered.

universal-insurance-logoUniversal entered the catastrophe bond market for the first time with this Cosaint Re catastrophe bond at the beginning of the month, the first time we’ve listed a subsidiary of the insurer within our cat bond Deal Directory.

Issued out of Singapore, as the company takes advantage of its ILS grant scheme, Universal is looking to secure multi-year, collateralized reinsurance protection against losses from U.S. named storms, so hurricanes and tropical storms, for its Universal Property and Casualty Insurance Company (UPCIC) and any direct subsidiaries with the Cosaint Re cat bond deal.

Cosaint Re Pte. Ltd. will issue a single tranche of Class A notes, the proceeds of the sale of which will be used to collateralize an underlying reinsurance agreement between Cosaint Re and UPCIC.

This reinsurance from Cosaint Re will cover UPCIC against certain losses from named storms, so tropical storms and hurricanes, across all U.S. states where the company has exposure, which includes east and northeast coast states, Gulf Coast states where UPCIC operates and also Hawaii.

But the majority of the exposure held within this Cosaint Re catastrophe bond will be in the state of Florida, Universal’s home, where expected losses are concentrated within the modelling.

The Cosaint Re Pte. catastrophe bond will provide Universal with reinsurance on an indemnity and per-occurrence basis, across a three-year term.

The deal was launched with Cosaint Re Pte. seeking to issue at least a $100 million Class A tranche of Class A notes, with the coverage attaching at just over $1.1 billion of UPCIC named storm losses in the first risk period.

Now, sources told us that the target size has been lifted by 50%, with a $150 million issuance now anticipated.

The now $150 million tranche of Class A notes have an initial expected loss of 2.97%.

The notes were at first offered to catastrophe bond investors with coupon in a guidance range from 9.5% to 10.25%, but we’re also now told that this has dropped, with spread guidance now in a range from 9.25% to 9.5%, so below the bottom-end of the initial range.

That signals yet another catastrophe bond with strong execution, which for a first time cat bond sponsor, such as Universal, will be pleasing.

We’ll update you when the Cosaint Re Pte. Ltd. (Series 2021-1) catastrophe bond has priced and you can read about this and every other cat bond transaction in the Artemis Deal Directory.

———————————————————————
Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.

Read previous post:
TransRe names Brandt to succeed departing Sapnar as President & CEO

TransRe, the global reinsurance arm of Alleghany Corporation, has announced that it is promoting Ken Brandt to President and Chief...

Close