SageSure grateful for continued ILS investor support as it closes second cat bond of 2024
SageSure, the specialist independent managing general underwriter of property catastrophe exposed insurance, is “grateful for the continued support” it receives from the capital markets as it announces the closing of its second catastrophe bond transaction of the year, the $130 million Gateway Re Ltd. (Series 2024-2).
The successful issuance of the firm’s latest transaction extends the SageSure-supported catastrophe bonds issued via Gateway Re to $1.16 billion in risk capital.
SageSure has been utilising the capital markets for reinsurance capacity for its underwriting partners through its Gateway Re series of cat bonds since May 2022.
Including this latest deal, the MGU has seen five Gateway Re cat bonds issued that protect its reciprocal change underwriting vehicles. This includes the $150 million Gateway Re Ltd. (Series 2022-1), the $355 million Gateway Re Ltd. (Series 2023-1), the $100 million Gateway Re Ltd. (Series 2023-2) second event deal, the $250 million Gateway Re Ltd. (Series 2024-1) deal, and the $130 million Gateway Re Ltd. (Series 2024-2) second and subsequent event deal.
As shown by the Artemis Deal Directory, there’s also been a $125m Gateway Re II Ltd. (Series 2023-1) deal for two other SageSure-linked insurance carriers, and a $50 million county-weighted retrocession cat bond in Gateway Re Ltd. (Series 2023-3).
Today, SageSure has announced that the single Class C tranche of Gateway Re 2024-2 notes priced 75 bps tighter than the mid-point of the initial price guidance. Artemis understands that the notes, which are structured as zero-coupon notes, priced at a rough spread equivalent of 8.25%, so below the initially marketed guidance of 8.5% to 9.5%.
As well as achieving strong execution in terms of pricing, SageSure benefited from strong investor appetite and was able to secure its full target limit of $130 million, having initially announced a notional range of $100 million to $130 million.
“SageSure is grateful for the ILS community’s confidence in SURE and the Gateway Re franchise. Catastrophe bonds have been an integral part of our underwriting partners’ reinsurance programs since 2022. The continued support from ILS investors enables growth in markets that need our solutions most,” said Terrence McLean, President and CEO of SageSure.
This cat bond provides second and subsequent event reinsurance coverage for the SureChoice Underwriters Reciprocal Exchange and the Elevate Reciprocal Exchange, two underwriting entities linked to SageSure.
With a maturity date of December 15th, 2024, the notes will only provide protection across a single hurricane season, and are designed to cover the reciprocals against losses from named storms affecting the US states of Alabama, Florida, North and South Carolina, Louisiana, Mississippi, and Texas.
As was the case with the March 2024 Gateway Re issuance, for this latest cat bond, Swiss Re Capital Markets served as the sole structuring agent and bookrunner for the issuance.
Jean-Louis Monnier, CEO of Swiss Re Capital Markets Corporation, commented, “Swiss Re is excited to once again partner with SURE and SageSure on this successful second-event catastrophe bond, a risk profile rarely seen in the ILS market.
“Structured as an efficient zero-coupon note, the Gateway Re issuance achieved competitive pricing and a remarkably strong execution. This transaction is a testament to the continued investor support for SURE, SageSure, and the Gateway Re franchise. It also demonstrates SURE and SageSure’s agility in securing different forms of alternative capital capacity.”
You can read all about this new Gateway Re Ltd. (Series 2024-2) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.
