CEA gets $215m Ursa Re cat bond at 11% reduced pricing

CEA gets $215m Ursa Re cat bond at 11% reduced pricing

The California Earthquake Authority (CEA) has effectively secured its very first disaster bond deal of 2021 at the upsized $215 million target, while the Ursa Re II Ltd. (Series 2021-1) disaster bond has been priced at the low-end of currently decreased discount coupon guidance.The prices has actually moved considerably, as soon as again reflecting high levels of financier appetite in the insurance-linked securities (ILS) market at this time, in specific for disaster bonds sponsored by recognised and relied on counterparties.
The CEA has actually now secured $215 million of fully collateralized California earthquake reinsurance defense with the brand-new issuance, which will take the earthquake insurance providers in-force catastrophe bond coverage to $2.34 billion when this deal completes in early March.
This new Ursa Re II 2021-1 catastrophe bond from the CEA launched to investors a few weeks ago, with a target at the time of protecting at least $150 countless collateralized earthquake reinsurance defense for the insurance provider.
The marketplace was receptive to the issuance and soon after the target was raised, with the feline bond expected to settle someplace up to $215 million in size.
Now that upsized target has been secured and Ursa Re II Ltd. will release a single $215 million Series 2021-1 Class F tranche of notes, which are being sold to third-party ILS investors and funds.
The profits of the sale will be used to collateralize an underlying earthquake retrocessional reinsurance agreement between Ursa Re II Ltd. and ceding reinsurer Swiss Re, which in turn will enter into a reinsurance agreement with the CEA.
The notes will offer the CEA with a $215 million source of collateralized California earthquake reinsurance protection across a roughly three-year and nine month term, with the cover provided on a yearly aggregate and indemnity trigger basis.
The single Class F tranche of notes from this Ursa Re II 2021-1 catastrophe bond issuance, which have a preliminary expected loss of 3.74%, were at first used to ILS financiers with price guidance in a variety from 6.75% to 7.25%.
The strong investor response assisted that cost assistance tumble, with the voucher variety dropping to 6.25% to 6.75%, so listed below the original spread assistance.
In the end, the CEA secured the upsized $215 million of reinsurance defense at a voucher of 6.25%, so the lowest-end of the lowered cost assistance variety.
Thats an approximately 11% decline in rates from the mid-point of initial guidance.
As we kept in mind, when this deal settled the California Earthquake Authority (CEA) will have $2.34 billion of disaster bond backed, multi-year earthquake reinsurance security in-force.
Thats lower than the high point of its feline bond program, so it is totally possible we see the CEA back in the market once again later this year as its reinsurance needs continue to broaden.
You can check out all about this new Ursa Re II Ltd. (Series 2021-1) catastrophe bond issuance from the California Earthquake Authority (CEA) and every other feline bond provided in the Artemis Deal Directory.

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!