Price guidance lowered for SCOR’s new Atlas Capital 2023-1 retro cat bond

Global reinsurance group SCOR has slashed the price guidance for its new Atlas Capital DAC (Series 2023-1) multi-peril retrocession focused catastrophe bond issuance, with updated spread guidance indicating a roughly -11.5% fall.

SCOR returned to the catastrophe bond market this month for what will be the seventeenth cat bond under an Atlas name, since sponsoring its first right back in the year 2000.

The company has used catastrophe bonds within its retrocessional reinsurance program, alongside other forms of traditional and capital market backed capacity.

SCOR’s $250 million Atlas Capital UK 2019 PLC (Series 2019-1) cat bond deal, is scheduled for maturity soon, so this new issuance will at least partly renew that expiring retrocessional reinsurance protection for SCOR.

However, it’s important to remember SCOR has been trimming its property cat book in recent quarters, so the need for coverage may have reduced somewhat.

Using a new Ireland based designated activity company named Atlas Capital DAC, SCOR was looking to secure at least $75 million of annual aggregate and weighted industry loss trigger based retro reinsurance protection, over a roughly three year term to the end of May 2026.

The target size has not changed, with the latest update indicating that $75 million remains the goal currently, however we’re told that the price guidance has been slashed at the same time.

The international multi-peril retro cat bond deal seeks coverage against US named storm and earthquake risks, Canada earthquakes and European windstorm industry-loss events for SCOR.

When the deal was launched, the $75 million of Series 2023-1 cat bond notes, that come with an initial base expected loss of 2.1%, were being marketed to cat bond funds and investors with spread price guidance in a range from 8.25% to 9.25%.

We’re now told that this price guidance has been updated to a range of 7.25% to 8.25%, so indicating a roughly -11.5% decline from the initial mid-point.

There’s still a chance SCOR could opt to grow this new catastrophe bond issuance, perhaps dependent on the price indications the reinsurance firm receives in response to the reduction in spread guidance.

You can read all about this Atlas Capital DAC (Series 2023-1) catastrophe bond from SCOR and every other cat bond transaction in the Artemis Deal Directory.