USAA’s Residential Re 2015-2 cat bond grows to $125m


Further to yesterdays update to U.S. military mutual insurer USAA’s Residential Reinsurance 2015 Ltd. (Series 2015-2) catastrophe bond deal, which saw the transaction price guidance narrow, it’s now emerged that the deal has upsized to $125 million.

From launch the Residential Re 2015-2 cat bond was seeking $100 million of protection from its single tranche of Series 2015-2 notes for USAA, as the insurer looks to secure its 25th layer of catastrophe bond backed reinsurance from the capital markets.

The deal has now grown by 25% to $125 million, we understand, likely due to higher demand from investors seeking to gain access to the notes.

At this stage the price guidance remains at the tightened range of 7% to 7.25%. We are told that the books close late today on this cat bond and that the notes will be priced tomorrow (Friday 20th).

So USAA looks set to secure an upsized $125 million four-year source of collateralised reinsurance protection against losses from U.S. tropical cyclones, earthquakes (plus fire following), severe thunderstorm, winter storm, wildfire, volcanic eruption and meteorite impact, on a per-occurrence basis and using an indemnity trigger.

We’ll update you when the final pricing details emerge.

Read all about USAA’s 25th catastrophe bond Residential Reinsurance 2015 Ltd. (Series 2015-2) and the previous 24 cat bonds sponsored by USAA in the Artemis Deal Directory.

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