AXA gets upsized €150m Eiffel Re cat bond priced at low-end of guidance

Global insurance and reinsurance group AXA has now finalised its new Eiffel Re Ltd. (Series 2023-1) catastrophe bond issuance to provide the upsized target of €150 million of European windstorm reinsurance protection, while the notes were priced at the low-end of initial spread guidance, we’ve learned.

AXA returned to the catastrophe bond market with its first deal since 2019 earlier in June, seeking at least €125 million in European windstorm reinsurance protection from the Eiffel Re 2023-1 issuance.

Eiffel Re Ltd. is actually the previously used Galilei Re Ltd. special purpose insurer located in Bermuda which AXA has now renamed.

As we then reported last week, AXA had lifted its target for reinsurance from its new cat bond, with the target increasing so that Eiffel Re was looking to issue a single tranche of Series 2023-1 catastrophe bond notes sized at up to €150 million.

We can now report that this higher target level has been achieved and the deal has successfully been upsized to provide AXA and its subsidiaries with a €150 million source of both reinsurance and retrocessional protection against European windstorm losses group-wide, on an industry-loss trigger and per-occurrence basis, across a roughly three and a half year term.

The €150 million in Series 2023-1 Class A notes that Eiffel Re Ltd. will issue, that come with an initial expected loss of 0.45%, have also now been priced at the end of last week.

The notes were first offered to investors with spread price guidance in a range from 3.25% to 3.75%, but that was subsequently revised and narrowed towards the lower-end of that range, at 3.25% to 3.5%.

We’ve now been told the notes priced to pay investors a spread of 3.25%, so at the low-end of initial guidance.

But, given the low expected loss, that means this Eiffel Re 2023-1 cat bond will still pay investors a multiple-at-market of over 7.2 times the initial expected loss.

For AXA this is a good result, as it has secured a larger than targeted slice of reinsurance and retro with its first catastrophe bond since 2019 and at the bottom end of its price target as well.

It’s notable that this is a European windstorm cat bond that will pay a reasonably high multiple as well, given cat bonds exposed to that peril have been relatively thin on the ground and when they have come to market they have priced with extremely thin multiples historically as well.

It will be interesting to see whether any other sponsors look to bring Euro wind cat bonds to market over the coming months, in advance of the 2023/4 winter storm season beginning for the region.

You can read all about AXA’s new Eiffel Re Ltd. (Series 2023-1) catastrophe bond and every transaction issued since 1996 in the Artemis Deal Directory.