Allianz secures €250m Blue Sky Re cat bond at top-end pricing

Global insurance giant Allianz has now secured the targeted €250 million in European windstorm reinsurance protection from its Blue Sky Re DAC (2023-1) catastrophe bond issuance, with the notes eventually being priced at the top-end of the initial guidance range.

Allianz returned to the catastrophe bond market in November, with a €250 million target for European windstorm reinsurance secured with this Blue Sky Re 2023-1 cat bond.

The target size did not change for this cat bond and we’re now told that the deal has priced successfully to provide that €250 million of European windstorm reinsurance to Allianz.

The €250 million of Series 2023-1 Class A notes set to be issued by Blue Sky Re Ltd., will provide Allianz group companies with capital markets backed reinsurance against European windstorm losses, on a weighted industry loss trigger and per-occurrence basis, across three calendar years from January 1st 2024, to the end of 2026.

The pricing guidance for the notes spread did narrow, as we reported in an update last week.

The €250 million of notes that Blue Sky Re DAC is now confirmed to be issuing have an initial expected loss of 2.14% and were initially offered to cat bond investors with price guidance for a spread of between 5% to 5.75%, which was then narrowed to a range of 5.5% to 5.75%.

We’re now told that the €250 million of Blue Sky Re Series 2023-1 Class A catastrophe bond notes have been priced with the spread at the top-end of guidance, to pay investors 5.75% above the risk free rate on the collateral.

Allianz has clearly balanced size versus price with this issuance, securing its targeted amount of reinsurance from the capital markets priced within the initial guidance, albeit at the top-end.

It’s another European property cat bond that sends a signal on how reinsurance pricing could move at the end of year renewals, while also showing that major European insurance underwriters are finding the cat bond market a competitive source of catastrophe reinsurance protection this year.

You can read all about this new Blue Sky Re DAC (2023-1)  catastrophe bond from Allianz in the Artemis Deal Directory.