Hiscox aims to upsize Ocelot Re cat bond to $125m at lower pricing

Hiscox Group is now aiming to upsize its first catastrophe bond in more than two decades by 25% to provide it $125 million in peak peril aggregate retrocessional reinsurance cover, while the company is also hoping to secure the Ocelot Re Ltd. (Series 2023-1) cat bond at reduced pricing.

Hiscox returned to the catastrophe bond market just over one week ago with this Ocelot Re transaction, which is its first cat bond sponsorship since 2002, when it sponsored the St Agatha Re Ltd. deal, which was the first cat bond to protect a Lloyd’s syndicate.

When this Ocelot Re 2023-1 cat bond first launched to investors, Hiscox was targeting $100 million of cover from the notes.

Artemis has learned that the target size for this issuance has been increased by 25%, with now $125 million of coverage sought from the Ocelot Re cat bond by Hiscox.

As a result, Ocelot Re Ltd. is now targeting an upsized $125 million issuance of Series 2023-1 Class A notes, to provide Hiscox with a multi-year source of US and Canada named storm and earthquake retrocession structured on an annual aggregate and weighted PCS industry-loss trigger basis, to run across three annual risk periods from calendar year 2024 through 2026.

The now $125 million of Ocelot Re Ltd. Series 2023-1 Class A catastrophe bond notes that are being offered, come with an initial expected loss of 2.66% and were first marketed to investors with price guidance for a spread of between 8.25% and 9%.

We now understand from sources that the price guidance has been lowered and narrowed, with a range of 7.75% to 8.25% now offered to cat bond investors.

Meaning that Hiscox is aiming to upsize its first catastrophe bond offering in two decades, while also hoping to secure its pricing at the bottom of guidance or even better, which would represent strong execution for the company.

You can read all about this Ocelot Re Ltd. (Series 2023-1) catastrophe bond from Hiscox and every other cat bond issuance in our extensive Artemis Deal Directory.