American Coastal lifts Armor Re II Florida wind cat bond to $200m

American Coastal Insurance Company is set to upsize its new Armor Re II Ltd. (Series 2024-1) Florida named storm catastrophe bond to $200 million, while the notes are set to price within the initial price guidance range, Artemis has learned.

American Coastal returned in March with a target to secure at least $150 million in Florida named storm reinsurance protection from this new Armor Re II 2024-1 cat bond issuance.

Now, we’re told the issuance will increase in size to provide the insurer $200 million of reinsurance protection, while the spread paid is set to be in the lower-half of the initial guidance.

Bermuda based special purpose insurer Armor Re II Ltd. is now expected to issue a single $200 million tranche of Series 2024-1 Class A notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement with American Coastal Insurance Company.

The $200 million of Armor Re II 2024-1 cat bond notes will provide American Coastal with a three-year source of Florida named storm and hurricane reinsurance protection, running to the end of April 2027.

The reinsurance protection from the notes is structured on an indemnity trigger and per-occurrence basis over the risk period.

With now $200 million of Class A notes on offer, their coverage would be set to attach at $275 million and cover a share of a layer of American Coastal’s reinsurance tower up to exhaustion at $575 million.

The $200 million of Class A notes that Armor Re II Ltd. is set to issue come with an initial attachment probability of 1.38%, an initial expected loss of 0.89% and were first offered to cat bond investors with spread price guidance in a range from 10% to 11%.

We’re now told the upsized $200 million of Armor Re II 2024-1 Class A notes will pay investors a spread of 10.25%, so within the initial guidance and towards the lower-end of it.

Having last attempted to sponsor a cat bond back in March 2020, but that Armor Re II 2020-1 issuance failing to receive the required support in the market and its book failing to build sufficiently in the early stages, no real surprise given the timing, American Coastal will be delighted with its latest visit to the cat bond market, looking set to secure more reinsurance than originally targeted at an improved price.

You can read all about this new Armor Re II Ltd. (Series 2024-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.