Massachusetts MPIUA’s Mayflower Re 2024 cat bond set for top-end pricing

Catastrophe bond investors continue to express their risk appetites through pricing and their demand for return, with the latest example being a pricing-up of the still $100 million Mayflower Re Ltd. (Series 2024-1) transaction from the Massachusetts Property Insurance Underwriting Association (MPIUA), Artemis can report.

It is the fifth catastrophe bond sponsored by the Massachusetts Property Insurance Underwriting Association (MPIUA), which is a residual market property insurance association, or FAIR Plan, for the Commonwealth of Massachusetts.

When this latest cat bond from the MPIUA was launched to investors earlier this month, the goal was to secure a $100 million source of indemnity based and annual aggregate reinsurance from the capital markets, to run over a three-year term until the end of June 2027.

We’ve now learned from sources that the issuance size has not changed, with the MPIUA’s target for this Mayflower Re 2024-1 catastrophe bond remaining for $100 million of reinsurance, so far.

But, at the same time the pricing had now risen to the upper-end of guidance, as cat bond investors demonstrate their minimum return requirements once again.

The $100 million of Mayflower Re Series 2024-1 Class A notes will provide the MPIUA with aggregate reinsurance against losses from Massachusetts named storms, severe thunderstorms and winter storm events.

The Class A notes have an initial base expected loss of 1.059% and were first marketed to investors with spread price guidance in a range from 4% to 4.5%, but we’re now told that the price has been lifted and fixed at the upper-end of that range, to pay investors a spread of 4.5%.

Which brings the pricing closely into line with the MPIUA’s 2023 cat bond, which included a Class A tranche of notes that had an initial expected loss of 1.084% and priced to pay investors a spread of 4.5%.

Being an annual aggregate deal, it would perhaps have been surprising had the notes priced much lower than the upper-end, which is now where our sources say the deal is likely to be finalised.

You can read all about this new Mayflower Re Ltd. (Series 2024-1) catastrophe bond and every other cat bond transaction issued since the market began in the Artemis Deal Directory.