On average, successful 144A cat bonds upsized by 63% in Q1 2021

On average, successful 144A cat bonds upsized by 63% in Q1 2021

During the most current quarter, the $50 million Class B tranche released through Sierra Ltd. (Series 2021-1) and the $150 million Class A tranche through Kizuna Re III Pte. Ltd. (Series 2021-1) were the only tranches to settle at their initial target price.
Starting at the lower end of the spectrum; both tranches of the Torrey Pines Re Pte Ltd. (Series 2021-1) transaction, sponsored by Palomar Specialty Insurance Company, upsized by 33% while marketing. With this offer, both the Class A and Class B tranches ultimately settled at $200 million in size.
The California Earthquake Authoritys ninth transaction, Ursa Re II Ltd. (Series 2021-1), finished at $215 million after seeing its target size spike by 43%.
Both the Class A tranche issued through Sierra Ltd. (Series 2021-1) and the single tranche from Cosaint Re Pte. Ltd. (Series 2021-1) upsized by 50% while marketing, which saw both issuances ultimately settle at $150 million.
FEMAs largest offer to date, FloodSmart Re Ltd. (Series 2021-1), was positioned in the market at a size of $575 million; after the Class A and Class B tranches upsized by 64% and 67%, respectively.
Japanese insurer Sompos most current market entry, Sakura Re Ltd. (Series 2021-1), completed at $400 million after both tranches upsized by 100% while marketing.
Finally, the 2 most dramatic increases in the quarter came from the $225 million First Coast Re Pte. Ltd. (Series 2021-1) transaction from Security First Insurance Company, and the $250 million Cape Lookout Re Ltd. (Series 2021-1) issuance from the North Carolina Insurance Underwriting Association, which upsized by 125% and 150%, respectively.
As the figures expose, investor need for the traditional 144A catastrophe bond product was robust in the first-quarter of the year, and the fact that all however two tranches provided upsized throughout the period shows that sponsors were more than delighted to take advantage of existing market conditions.
Whats more, as the market moves further into Q2 the landscape stays favourable for continued, strong investor hunger. And, with sponsors seemingly excited to protect greater levels of reinsurance and retrocessional security from the capital markets, it will be intriguing to see if the trend of offers upsizing while marketing continues.
Stay tuned to Artemis as we move through the second-quarter of 2021, which is anticipated to be a hectic period for brand-new catastrophe bond issuance and well detail every deal in our Deal Directory.
Well keep you updated on all disaster bond and associated ILS transaction issuance, in addition to developing trends in the cat bond and insurance-linked securities (ILS) market.
For full details of first-quarter 2021 cat bond and associated ILS issuance, consisting of a breakdown of offer circulation by elements such as hazards, triggers, expected loss, and prices, in addition to analysis of the issuance trends seen by month and year.
Download your free copy of Artemis Q1 2021 Cat Bond & & ILS Market Report here.
For copies of all our disaster bond market reports, visit our archive page and download them all.

Strong investor appetite enabled sponsors of traditional 144A catastrophe bond deals to upsize target levels of reinsurance defense throughout the first-quarter of the year.An aspect of Q1 2021 disaster bond and associated insurance-linked securities (ILS) issuance was the upsizing of home catastrophe deals.
Artemis information shows that during the duration, 11 out of 13 tranches provided upsized from their initial target.
Driven by favourable market conditions and robust financier hunger for reinsurance-linked returns, sponsors protected an average upsize while marketing of 63% in Q1 2021.
As the chart listed below highlights, this is the 3rd time in the past 5 quarters that, usually, 144A feline bond transactions released have upsized by more than 50%.

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