Universal’s Cosaint Re cat bond target lifted to $150m, while pricing drops

Universal’s Cosaint Re cat bond target lifted to $150m, while pricing drops

The very first disaster bond to be sponsored by Florida headquartered insurance company Universal Insurance Holdings looks most likely to upsize with the target now raised by 50% to $150 million, while at the exact same time the cost guidance for the Cosaint Re Pte. Ltd. (Series 2021-1) deal has been lowered.Universal entered the catastrophe bond market for the very first time with this Cosaint Re disaster bond at the start of the month, the very first time weve listed a subsidiary of the insurance company within our cat bond Deal Directory.
Provided out of Singapore, as the company makes the most of its ILS grant scheme, Universal is seeking to secure multi-year, collateralized reinsurance protection against losses from U.S. called storms, so cyclones and tropical storms, for its Universal Property and Casualty Insurance Company (UPCIC) and any direct subsidiaries with the Cosaint Re cat bond offer.
Cosaint Re Pte. Ltd. will provide a single tranche of Class A notes, the proceeds of the sale of which will be used to collateralize an underlying reinsurance arrangement between Cosaint Re and UPCIC.
This reinsurance from Cosaint Re will cover UPCIC against specific losses from called storms, so tropical storms and cyclones, throughout all U.S. states where the business has exposure, that includes northeast and east coast states, Gulf Coast specifies where UPCIC runs and likewise Hawaii.
The bulk of the exposure held within this Cosaint Re disaster bond will be in the state of Florida, Universals home, where anticipated losses are focused within the modelling.
The Cosaint Re Pte. disaster bond will supply Universal with reinsurance on an indemnity and per-occurrence basis, across a three-year term.
The deal was introduced with Cosaint Re Pte. seeking to provide at least a $100 million Class A tranche of Class A keeps in mind, with the coverage attaching at just over $1.1 billion of UPCIC called storm losses in the first threat period.
Now, sources informed us that the target size has actually been raised by 50%, with a $150 million issuance now expected.
The now $150 million tranche of Class A notes have an initial predicted loss of 2.97%.
The notes were at first provided to catastrophe bond financiers with voucher in a guidance range from 9.5% to 10.25%, however were likewise now informed that this has dropped, with spread assistance now in a range from 9.25% to 9.5%, so below the bottom-end of the initial range.
That signals yet another catastrophe bond with strong execution, which for a very first time cat bond sponsor, such as Universal, will be pleasing.
Well update you when the Cosaint Re Pte. Ltd. (Series 2021-1) catastrophe bond has actually priced and you can check out this and every other cat bond transaction in the Artemis Deal Directory.

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