SafePoint shrinks Nature Coast Re 2024 cat bond to $50m as price rises
SafePoint Insurance Company has lowered the target size for its new Nature Coast Re Ltd. (Series 2024-1) catastrophe bond to $50 million, while at the same time the pricing of the notes has risen, Artemis has learned.
When the company launched this cat bond offering to investors back at the middle of May, the insurer’s target was to secure $75 million of collateralized reinsurance capacity from the capital markets.
Over one month later, the first updated information has now become available, as this deal had gone quiet which we suspect might have been due to the way the market price dynamic was evolving at the time its marketing began.
We’re now told by sources that the target size has been reduced, with just $50 million of Series 2024-1 notes now on offer from Nature Coast Re Ltd.
This Series 2024-1 cat bond issuance from Nature Coast Re sees SafePoint looking to secure coverage for an expanded area, of Florida, Louisiana, Alabama, Mississippi, and Texas.
At the same time, the company is seeking reinsurance coverage for an expanded list of entities, compared to previous cat bond deals, with the Nature Coast Re 2024-1 cat bond set to protect SafePoint Insurance Company, its Louisiana focused entity Cajun Underwriters Reciprocal Exchange, and its more recently launched Manatee Insurance Exchange that operates in Florida only.
The now $50 million of cat bond notes will provide SafePoint and its two reciprocal underwriting entities with a source of fully-collateralized reinsurance protection against named storm losses in the covered states on a per-occurrence basis and using an indemnity trigger, with coverage running until early June 2028.
The now $50 million of Class A notes that Nature Coast Re Ltd. is set to issue come with an initial expected loss of 1.96%, and were first offered to investors with spreads in a guidance range from 12.75% to 13.75%.
We’re now told that the pricing has risen to 14.75%, which represents a roughly 11% increase from the mid-point of initial spread price guidance.
Which is likely the driver for SafePoint paring back its appetite for the size of this new catastrophe bond.
We suspect this is where this new cat bond from SafePoint will settle now, but we will update you if anything changes.
This will be SafePoint’s sixth catastrophe bond issuance and its second under the Nature Coast Re program, although there are seven cat bonds from SafePoint listed in our Deal Directory, due to a 2019 cat bond not being issued as traditional reinsurance was seen as a more cost-effective option at the time.
You can read all about this new Nature Coast Re Ltd. (Series 2024-1) catastrophe bond from Safepoint as well as details on every other cat bond ever issued in the extensive Artemis Deal Directory.
