VIG Re targets lower pricing for €50m debut Charles Bridge Re catastrophe bond

VIG Re is looking to achieve lower pricing for its debut catastrophe bond sponsorship, as the spread guidance has been reduced for the still targeted €50 million of fully-collateralized European windstorm retrocession through the Charles Bridge Re 2026 DAC issuance, Artemis understands.

VIG Re, the reinsurance arm of Vienna Insurance Group, entered the catastrophe bond market for the first time last month.

While the company operates as a leading market-facing reinsurer in Central and Eastern Europe it is also pursuing international growth and expansion, while at the same time providing reinsurance to VIG Group companies.

The target issuance size for this debut Charles Bridge Re 2026 DAC for VIG Re remains unchanged we are told, with still €50 million of retrocessional reinsurance windstorm protection being sought from the capital markets for VIG Re.

The single tranche of notes are designed to provide VIG Re with retrocession against losses from European windstorms on a weighted industry loss index trigger and per-occurrence basis, to run across a four year term, from January 1st 2027.

The €50 million of Charles Bridge Re 2026 DAC notes come with an initial  expected loss of 1.77% and were first offered to investors with price guidance for a spread of between 3% and 3.5%.

We’re now told that the price guidance has been lowered, with a revised range of 2.5% to 3% being offered to investors.

For the latest first time sponsor in the cat bond market, this could end up a positive result, in the targeted protection looking likely to be secured with the initial risk interest spread pricing at the bottom-end of initial guidance or lower.

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