Inigo secures $100m Montoya Re cat bond priced 9% below guidance

Inigo, the London headquartered specialty insurance and reinsurance underwriter, has now secured its new catastrophe bond to provide it the targeted $100 million of protection, as the Montoya Re Ltd. (Series 2024-1) cat bond notes have now been priced 9% below the mid-point of initial guidance.

Inigo came back to the catastrophe bond market to sponsor a third Montoya Re cat bond deal earlier in December.

The re/insurer had a target to secure at least $100 million in aggregate multi-peril retrocessional reinsurance protection with this Montoya Re 2024-1 cat bond deal, a level of coverage it has now achieved.

As a result, this third Montoya Re cat bond will provide Inigo with a capital markets backed and fully-collateralized source of industry-loss triggered retrocessional protection, covering it against large market loss events caused by US named storms, and North American earthquakes, including Canada.

Inigo’s Syndicate 1301 at Lloyd’s is be the ultimate beneficiary of the now confirmed at $100 million in coverage, with that protection set to run for more than three years to the end of March 2027.

The Montoya Re 2024-1 cat bond notes have been structured to use a PCS industry loss index trigger and provide their cover on an annual aggregate basis to Inigo.

The now finalised as $100 million of Class A Montoya Re 2024-1 cat bond notes come with an initial expected loss of 4.46% and were first offered to investors with coupon price guidance in a range from 12.25% to 13%.

As we reported earlier this week, the price guidance for the notes had been lowered, with an updated spread range of 11.5% to 12.25% being offered to cat bond investors.

Now, we’re told that Inigo has secured its third cat bond with pricing at the bottom-end of that reduced guidance range.

The spread that will be paid to investors has now been fixed at the lowest level of 11.5%, we understand, which represents a roughly 9% decline in pricing from the initial mid-point of guidance.

As a result, Inigo has secured the retrocessional reinsurance coverage from its third Montoya Re catastrophe bond deal at a more cost-efficient pricing level, on a multiple basis, than it had with its late 2022 cat bond issuance.

Inigo had sponsored its first two catastrophe bonds in 2022, securing itself $225 million of annual aggregate retrocessional protection across the pair of Montoya Re cat bonds.

Now, with this third Montoya Re cat bond priced and ready to settle in early January 2024, Inigo will go through the coming year with $325 million of aggregate retro reinsurance protection in-force from the catastrophe bond market.

You can read all about this new Montoya Re Ltd. (Series 2024-1) catastrophe bond, the second from Inigo Insurance, as wel as details on every other cat bond issued in our extensive Artemis Deal Directory.