NN Group gets €75m Orange Capital Re cat bond priced at top of guidance

NN Group, or Nationale-Nederlanden, has now finalised its new Orange Capital Re DAC (Series 2023-1) catastrophe bond at €75 million in size, while the notes have been priced at the top-end of the initial spread guidance.

NN Group returned to the cat bond market at the end of October, seeking €75 million or more in collateralised reinsurance from the capital markets to cover losses from European natural perils.

It is the second cat bond from the insurer, as NN Group had first entered the catastrophe bond market in 2021, securing €75 million in collateralised European windstorm and severe thunderstorm catastrophe reinsurance with a debut Orange Capital Re DAC 2021-1 issuance.

This second Orange Capital Re 2023-1 cat bond sees NN Group seeking to secure €75 million or more in catastrophe reinsurance to cover windstorm and severe thunderstorm risks in Belgium and the Netherlands only, on an indemnity and per-occurrence basis across a three year term, from the start of 2024 to the end of 2026.

This issuance has not upsized, but as we reported earlier the spread guidance did get adjusted during the marketing of the Orange Capital Re cat bond.

The still €75 million tranche of Series 2023-1 Class A notes, that have an initial expected loss of 3.42%, were initially offered to cat bond investors with spread price guidance in a range from 6.75% to 7.5%.

As we said, that guidance was subsequently adjusted and narrowed to a range of 7.25% to 7.5%, so towards the top-end.

Now, we’ve been told that the Orange Capital Re DAC 2023-1 cat bond notes have been priced at the upper-end of the range, to pay investors a spread of 7.5%.

So, NN Group has successfully secured its targeted €75 million of European property catastrophe reinsurance for two of its peak perils.

As we’ve been explaining, this deal provides an important indication for how European catastrophe reinsurance renewals may go at the end of the year. A number of cat bonds and ILS transactions have now been priced above the initial mid-point of guidance to cover European property catastrophe risks in recent weeks and with others still marketing it will be interesting to see what further price indications can be secured from the cat bond market as the renewal approaches.

You can read all about the Orange Capital Re DAC (Series 2023-1)  catastrophe bond and every cat bond deal ever issued in our Artemis Deal Directory.