Allstate successfully doubles new Sanders Re cat bond to $400m
US primary insurer Allstate has successfully secured the targeted doubling in size of its latest catastrophe bond, with the Sanders Re III Ltd. (Series 2024-1) issuance pricing to provide the carrier $400 million in catastrophe reinsurance from the capital markets.
Allstate has benefited from strong investor demand for its latest cat bond, its eighteenth catastrophe bond issuance we’ve tracked, with the deal upsizing by 100% and the notes then being priced at the bottom-end of initial guidance.
Allstate returned to the cat bond market in December to use its Sanders Re III Ltd. special purpose vehicle for the issuance of a single tranche of Series 2024-1 cat bond notes, aiming to provide at least $200 million in fully-collateralized reinsurance.
As we were first to report, the target size of the issuance was increased considerably, with Allstate then aiming to secure between $300 million and $350 million of reinsurance protection from this Sanders Re III 2024-1 cat bond issuance.
Later, we also reported that the size target was raised further, with the target increased to make this a $400 million issuance of notes for Allstate.
Now, sources have told us that Allstate has successfully secured the targeted doubling in size of this Sanders Re III 2024-1 catastrophe bond, with the deal priced to provide $400 million of collateralized reinsurance protection from its notes.
As a result, Allstate will now benefit from $400 million of reinsurance cover for certain personal lines property and auto losses from multiple US perils, on a per-occurrence and indemnity trigger basis over a more than four year term, from the date of issuance running to maturity at the end of March 2028, with this new Sanders cat bond.
The now confirmed as $400 million of Sanders Re III 2024-1 Class A cat bond notes come with an initial expected loss of 0.8884%, have now been priced to pay investors a spread of 5.75%, we are told, which is the lowest-end of the originally marketed 5.75% to 6.5% range.
While this new cat bond priced down, the multiple of expected loss at issuance is still above the current averages for the marketplace, at the pricing level achieved, which might go some way to help explain the strong investor demand Allstate has clearly experienced.
With no maturities until April for Allstate’s currently outstanding catastrophe bonds, the insurer will move to the top of our catastrophe bond sponsor leaderboard once this new deal settles, with almost $2.9 billion of cat bond backed reinsurance in-force.
You can read all about this Sanders Re III Ltd. (Series 2024-1) from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.
