Chubb aims to double first 144A cyber cat bond to $200m in size

Global re/insurance giant Chubb is now looking to double in size its debut East Lane Re VII Ltd. (Series 2024-1) cyber catastrophe bond transaction, with $200 million of cyber reinsurance protection now being sought from the deal.

Chubb returned to the catastrophe bond market in November, its first time in the cat bond market since 2015, looking to sponsor its first full 144A cyber catastrophe bond issuance, as the company seeks more reinsurance for its growing cyber book.

At launch to investors, the East Lane Re VII Ltd. vehicle was aiming to issue $100 million in Series 2024-1 Class A notes, to collateralize a cyber reinsurance agreement between the issuer and Chubb.

Now, we’re told the latest update to the deal means Chubb is now seeking $200 million in reinsurance, a potentially significant upsizing for what is only the third full cyber cat bond ever.

The now up to $200 million or greater in Class A notes will provide Chubb with a two-year source of reinsurance protection against widespread cyber loss events, on an indemnity trigger and per-occurrence basis.

At the same time as looking set to double in size, we’re told the price guidance has been lowered for Chubb’s first cyber catastrophe bond.

Having initially been marketed with spread price guidance in a range from 8.75% to 9.25%, we’re now told the notes are being offered with price guidance of 7.5% to 8%, a significant drop that suggests final pricing will be well-below the bottom-end of guidance.

This could be a very strong result for Chubb, with its first cyber cat bond now looking set to double in size, while pricing well below the initial guidance.

It also sends a strong signal for the catastrophe bond market’s acceptance of cyber risk, which should help to attract additional cyber cat bond sponsors.

You can read all about this East Lane Re VII Ltd. (Series 2024-1) catastrophe bond from Chubb and every other cat bond issued in the Artemis Deal Directory.