Tokio Marine targets lower pricing for $200m Umigame Re cat bond

Tokio Marine targets lower pricing for $200m Umigame Re cat bond

Japanese primary insurance group Tokio Marine & & Nichido Fire Insurance Co. Ltd. is on track to protect its most current disaster bond at reduced pricing, as the marketplace spreads on the $200 million Umigame Re Pte. Ltd. (Series 2021-1) issuance have all fallen.Tokio Marine & & Nichido Fire went back to the catastrophe bond market this month, with the new Umigame Re 2021-1 transaction the insurance companies initially ever multi-peril cat bond deal fthat we have actually noted in our Deal Directory.
In reality, this is Tokio Marines first feline bond issuance to cover tropical storm threats in Japan given that 2011, while the insurance company is also looking for reinsurance security versus Japanese flood losses through the deal.
Singapore domiciled Umigame Re Ptd. Ltd. will issue three tranches of notes, to supply reinsurance security running throughout four danger durations, using nearly four years of cover up to the end of March 2025.
The reinsurance will safeguard the sponsor versus losses from Japanese typhoons or Japanese flood events, on an indemnity trigger and per-occurrence basis, however with one tranche able to supply first-event protection to one layer of the insurance providers reinsurance tower, or subsequent and second event protection to another.
We comprehend that the size of the issuance has not altered, with the targeted $200 countless reinsurance still in scope from this issuance.
Umigame Re will release a $100 million Class A-1 tranche of notes to provide first-event tropical cyclone or flood protection to a greater layer of the reinsurance tower, connecting at JPY 400 billion.
This tranche of Class A-1 notes have a preliminary anticipated loss of 1.31% and were very first offered to cat bond financiers with price assistance in a variety from 2.5% to 2.75%. However were now informed that this has actually fallen, with guidance revised to 2.25% to 2.5%.
A $50 million Class B tranche of notes will provide hurricane and flood security throughout a lower layer of the reinsurance tower, connecting at JPY 220 billion.
This Class B tranche of notes will have a predicted loss of 3.14% and were first used to cat bond investors with price assistance in a range from 5% to 5.75%. The assistance for this tranche has also been lowered, to 4.75% to 5%, were informed.
The final currently $50 million Class A-2 layer are the ones that can supply coverage to either layer of the reinsurance tower, in providing extra first-event coverage to the higher layer attaching at JPY 400 billion, or subsequent and second events impacting the lower layer at JPY 220 billion.
The Class A-2 notes have an initial expected loss of 1.32%, which unites both the protections this layer offers we understand, and were very first provided to investors with discount coupon price assistance in a range from 2.75% to 3%. Once again, the cost guidance has actually been minimized and now stands at 2.5% to 2.75% for this tranche.
As an outcome, Tokio Marine looks set to protect its targeted $200 countless reinsurance from the capital markets with its latest catastrophe bond, however at keener prices than initially prepared for.
You can read everything about this new Umigame Re Pte. Ltd. (Series 2021-1) catastrophe bond and every other cat bond released in our substantial Deal Directory.

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