TransRe launches debut cat bond Bowline Re
TransRe has unveiled its first cat bond, the $200mn Bowline Re, according to sources.
The carrier is one of a number of reinsurers to seek out cat bond cover for the first time in recent years. Validus completed its Tailwind Re deal late last year, and more recently, Aspen issued its first cat bond cover since the financial crisis.
TransRe’s annual aggregate transaction will give the reinsurer protection against named storms, earthquake and severe thunderstorm risks in the US, Puerto Rico, the US Virgin Islands and Canada.
The carrier is offering a spread of 425-475 basis points (bps), which at the mid-point would provide investors with a multiple of 2.49x the sensitivity-case expected loss of 181 bps.
The Bowline Re 2018-1 class A notes have been modelled by AIR Worldwide, while Aon Securities is acting as sole structuring agent and book runner.
Despite last year’s catastrophe losses, the cat bond market continues to offer sponsors very attractive rates.
Fellow reinsurer Aspen’s Bermuda's Kendall Re cat bond settled 9 percent below the mid-point of its initial target range at 550-600 bps at 525 bps.
Meanwhile, the size of the Kendall Re 2018-1 deal settled at $225mn, up 50 percent from the initial $150mn that Aspen Bermuda was seeking.
Louisiana Citizens Property Insurance Corporation’s $100mn Pelican IV Re 2018-1 cat bond priced at 225 bps last week, matching the coupon on last year’s Pelican Re issuance, which at the time set a new absolute low for a deal with US wind exposure.