Prologis’ Logistics Re cat bond sees pricing narrow towards upper-end

Prologis’ Logistics Re cat bond sees pricing narrow towards upper-end

The very first disaster bond from logistics, warehousing and supply-chain concentrated genuine estate owner and financier Prologis, Inc. has actually seen its rates guidance tighten towards the upper-end, while the issuance size remains at $95 million for the Logistics Re Ltd. (Series 2021-1) feline bond issuance.Prologis went into the disaster bond market for the very first time in November, becoming the most recent first-time corporate sponsor entrant to the insurance-linked securities (ILS) market.
Prologis operates as a real estate financial investment trust, investing and owning in commercial real estate, mainly linked to the warehousing, logistics and supply-chain sectors and with a United States focus, although it has global operations.
The company developed an unique purpose insurer (SPI) called Logistics Re Ltd. in Bermuda for the purpose of providing catastrophe bond programs and notes.
Logistics Re Ltd. started this problem process seeking to provide a single $95 million or bigger Class A tranche of Series 2021-1 disaster bond keeps in mind to financiers.
Those notes will be offered to feline bond investors and the earnings used to collateralize retrocessional reinsurance agreements between the SPI and Hannover Re. Hannover Re will then supply reinsurance to the captive insurance company, Solution Insurance Ltd. which will in turn guarantee Prologis, Inc
. The issuance stays sized at $95 million, were informed, and the Class A notes are set to supply Prologis with a three-year source of United States earthquake insurance security, covering the 50 states (with California the peak exposure) on an indemnity and per-occurrence basis.
The Class A notes connect at $350 million of losses to Prologis insurance coverage tower and cover a percentage of losses approximately $550 million, providing a preliminary accessory probability of 1.559% and a preliminary predicted loss of 1.094%.
The Logistics Re 2021-1 notes were first used to cat bond investors with coupon assistance in a variety from 3% to 3.5%.
Were now informed that assistance was tightened towards the upper-end of that range, with the notes provided with a coupon of between 3.25% and 3.5%.
Which implies the notes could still price at the initial mid-point, which would be a great outcome for Prologis in its first sponsorship of a catastrophe bond.
You can read everything about the Logistics Re Ltd. (Series 2021-1) catastrophe bond and every other cat bond issuance in the Artemis Deal Directory.

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