The California Earthquake Authority’s (CEA) Ursa Re Ltd. (Series 2017-1) catastrophe bond issue now looks set to grow even further than anticipated, with the latest reports stating that the deal is likely to now complete to offer $925 million of reinsurance coverage to the insurer.
Just yesterday we explained that the CEA’s latest transaction would be its largest yet, with the market expecting a deal size of $800 million to $900 million.
Now, investor demand and the CEA’s desire for efficient collateralized reinsurance coverage from the cat bond market look set to grow the transaction even further, with sources telling us that the target for deal completion is now $925 million.
The Class B tranche of notes, which launched at $200 million in size, but were slated to grow to between $375 million and $425 million, have grown further and are now set for $425 million we understand, while the price guidance remains fixed at the upper end of guidance at 3.5%.
The Class E notes, which were a $300 million layer initially, but grew to an expected range of $425 million to $475 million of coverage, are now set for completion at $500 million, with the pricing fixed at the upper end of guidance at 6%.
When completed, this Ursa Re 2017-1 catastrophe bond will be the CEA’s largest single source of capital market backed California earthquake reinsurance coverage supported by the cat bond market and its investors.
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