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Weston secures $45m Marlin Re cat bond at top of elevated pricing


Weston Property and Casualty Insurance, a coastal risk focused insurance carrier majority owned by insurance-linked securities (ILS) investment manager Hudson Structured Capital Management (investing as HSCM Bermuda), has now secured its first Marlin Re Ltd. (Series 2022-1) catastrophe bond at $45 million in size, with pricing now fixed at the top of elevated guidance.

weston-insurance-logoMarlin Re Ltd. has been established as a Bermuda based company for the issuance of series of catastrophe bonds and two Series of notes were being issued by the company, one to provide reinsurance for this sponsor Weston, the other for Southern Fidelity.

Issuance of the Southern Fidelity notes were pulled, which was related to the fact the insurer had halted its Florida operations as it waited to secure its reinsurance, with the cat bond not looking likely to be part of these arrangements any more.

So just the Marlin Re Ltd. (Series 2022-1) cat bond issuance remained, which will provide named storm and hurricane reinsurance protection to Weston Property and Casualty Insurance Company.

Originally, this cat bond issuance had featured three tranches of notes, with a target for more than $70 million of reinsurance, but only the Class A notes survived and were priced.

The Marlin Re 2022-1 Class A notes will provide Weston with reinsurance protection against named storm impacts in the states of Florida, Louisiana, Mississippi, Texas and South Carolina across a two year term on an indemnity and per-occurrence basis, from June 8th.

This remaining tranche of notes, which had originally been $50 million in size, were reduced to $45 million, which is where they have now been finalised.

Attaching at $220 million of losses, with an initial expected loss of 2.88%, the Marlin Re 2022-1 Class A notes were first offered to cat bond investors with price guidance of 10.5% to 11.5%, but that pricing was elevated significantly to between 15% and 16%.

We’re now told that the $45 million of Marlin Re 2022-1 Class A notes were eventually priced at the top-end of the elevated price guidance, at 16%.

It’s encouraging to see the Weston focused Marlin Re catastrophe bond make it to market, when the Southern Fidelity did not.

This adds yet another new first-time catastrophe bond sponsor to second-quarter issuance in 2022.

You can read all about this Marlin Re Ltd. (Series 2022-1) catastrophe bond and every other cat bond deal in our extensive Artemis Deal Directory.

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