PURE gets debut $105m Ashera Re cat bond at below guidance pricing
High-net worth insurance specialist unit and member of the Tokio Marine Group, PURE, has now secured its debut catastrophe bond at the slightly upsized $105 million, while the Ashera Re Ltd. (Series 2024-1) notes have been priced below the initial guidance, Artemis has learned.
The below-guidance pricing indicates a strong result for another first time cat bond sponsor, which should help to encourage these types of companies to return to the market in future years.
PURE entered the catastrophe bond market for its first issuance at the beginning of March, aiming to secure a multi-year source of capital markets backed and fully-collateralized peak peril catastrophe reinsurance, to protect the portfolios of its Privilege Underwriters Reciprocal Exchange (PURE), which is Florida domiciled, and PURE Specialty Exchange, which is an Arizona-domiciled Domestic Surplus Lines insurer.
When the deal was first launched to investors, PURE’s target was to secure $100 million of reinsurance from the issuance, to cover certain losses from named storms and earthquakes affecting the US and Canada.
As we reported in our first update on this cat bond deal, the target was then raised to $105 million.
Sources now tell us that with the notes priced today, PURE has secured that slightly upsized $105 million of reinsurance with its debut cat bond issuance.
The reinsurance coverage will be on an indemnity trigger and per-occurrence basis, across a three-year term running from April 1st, covering PURE’s underwriting entities across a portfolio of personal property insurance business lines, which includes high value homes, motor, art and collectibles, and personal boat policies.
The $105 million of Series 2024-1 Class A notes that Ashera Re Ltd. will now issue come with an initial base expected loss of 1.68% and were at first offered to cat bond investors with spread price guidance in a range from 5.25% to 5.75%, which was subsequently lowered to an updated range of between 5% and 5.25%.
We now understand that the $105 million of notes have now been priced to pay investors a spread of 5%, so at the bottom-end of reduced guidance.
Which, as we said, is a strong result and execution for a first time sponsor of catastrophe bonds, with PURE now set to benefit from a little more catastrophe reinsurance than it had originally targeted at considerably more attractive pricing, as the spread was finalised some 9% below the mid-point of initial guidance.
You can read all about this new Ashera Re Ltd. (Series 2024-1) catastrophe bond and every cat bond deal in the Artemis Deal Directory.
