Arch sponsoring $100m Ramble Re catastrophe bond

Arch Capital Group, the Bermuda headquartered specialty insurance and reinsurance company, is back in the catastrophe bond market for what is only its second time, to sponsor a currently $100 million Ramble Re Ltd. (Series 2024-1) transaction to secure capital markets backed property catastrophe retrocession.

Arch Capital is of course well-known as a sponsor of mortgage insurance-linked securities (ILS) deals and then in 2021 sponsored its first property cat bond, the Claveau Re deal.

Now, Arch is back, again looking to secure retrocession for its Arch Reinsurance entity, its main Bermuda based reinsurance underwriting company.

Ramble Re Ltd. will look to issue a single tranche of Series 2024-1 Class A notes that will be sold to investors and the proceeds used to collateralize a retro reinsurance agreement between it and Arch Re.

A $100 million issuance is targeted and that is slated to provide Arch Re with a weighted industry loss trigger based source of retro, on a per-occurrence basis across a three-year term, we understand.

The protection will cover Arch Re against significant US Northeast named storm and US and Canada earthquake industry loss events.

We’re told the $100 million of Series 2024-1 Class A notes that Ramble Re Ltd. will issue are set to have an initial attachment probability of 4.13%, an initial expected loss of 3.19% and are offered with spread guidance in a range from 6.75% to 7.5%.

It’s also notable that this is the first catastrophe bond we’ve seen to feature Lockton Re Capital Markets as one of facilitators, acting as a co-manager in this case.

This is also now the second cat bond issuance where Howden Tiger Capital Markets & Advisory has taken on both sole structurer and bookrunner roles, showing that firm gaining traction in the cat bond space.