Logistics Re cat bond priced at top-end of guidance for sponsor Prologis

Logistics Re cat bond priced at top-end of guidance for sponsor Prologis

The very first catastrophe bond from logistics, warehousing and supply-chain concentrated realty owner and investor Prologis, Inc. has now been priced at the top-end of initial assistance, while the issuance size remained at $95 million for the Logistics Re Ltd. (Series 2021-1) feline bond issuance.Prologis ventured into the catastrophe bond market for insurance protection for the first time in November, ending up being the current business sponsor brand-new entrant to the insurance-linked securities (ILS) market.
Prologis operates as a real estate financial investment trust, both owning and investing in business genuine estate, mostly linked to the warehousing, logistics and supply-chain sectors and with a United States focus, although it does have international operations.
The company established an unique function insurance provider (SPI) named Logistics Re Ltd. in Bermuda to provide disaster bond programs and notes and assist it access the capital markets for disaster insurance coverage defense.
Logistics Re Ltd. was at first intending to use a single $95 million or bigger Class A tranche of Series 2021-1 disaster bond keeps in mind to investors.
The feline bond keeps in mind provided will be offered to ILS investors and the profits used to collateralize retrocessional reinsurance agreements in between the SPI, Logistics Re, and Hannover Re.
Hannover Re will then supply reinsurance directly to Prologis captive insurance provider, Solution Insurance Ltd. which will in turn offer the insurance coverage to Prologis, Inc
. The issuance eventually settled at the initial targeted $95 million in size, we comprehend.
The Class A notes are set to provide Prologis with a three-year, $95 million source of US earthquake insurance coverage defense, covering the 50 states (with California the peak exposure) on an indemnity and per-occurrence basis.
The Class A notes will attach when Prologis losses from an event surpass $350 million and cover a percentage of losses up to detachment at $550 million, providing the notes an initial attachment possibility of 1.559% and an initial predicted loss of 1.094%.
The Logistics Re 2021-1 notes were very first offered to cat bond financiers with discount coupon guidance in a range from 3% to 3.5%.
As we discussed late recently that guidance was tightened towards the upper-end of the variety, with the notes then offered with a discount coupon of in between 3.25% and 3.5% just prior to final rates.
Were now told by sources that the notes were eventually priced at the top-end of assistance, so with a coupon of 3.5%.
That gives the $95 million of cat bond notes issued by Logistics Re a reasonably high multiple-at-market for an US quake feline bond, which is potentially a reflection of Prologis broad commercial residential or commercial property exposure and also the fact it is a very first time feline bond sponsor.
You can read all about the Logistics Re Ltd. (Series 2021-1) catastrophe bond and every other feline bond issuance in the Artemis Deal Directory.

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