Security First targets lower pricing for $100m First Coast Re IV cat bond

Security First Insurance Company, the Florida domestic homeowners insurer, is now targeting lower pricing for its new First Coast Re IV Ltd. (Series 2023-1) catastrophe bond issuance, while the size target hasn’t changed at $100 million, we are told.

We reported that Security First returned to the catastrophe bond market for what will be its fifth issuance at the beginning of March.

You can read about each of the Security First cat bonds in our Deal Directory.

The insurer was seeking $100 million or more in collateralized reinsurance protection against Florida named storms and severe thunderstorms, on an indemnity trigger, per-occurrence and cascading basis, through a Series 2023-1 Class A tranche of notes issued by Bermuda-based notes issued by First Coast Re IV Ltd.

We’re now told that the size of the issuance remains at $100 million for Security First, as the insurer seemingly becomes the latest to prioritise pricing over size of its new cat bond, a trend we’ve been watching this year.

The still $100 million of Series 2023-1 Class A notes that First Coast Re IV will issue have an initial base expected loss of 1.25% and were initially offered to cat bond funds and investors with spread guidance in a range from 10% to 11%.

We’re now told that the price guidance has been lowered, with the notes offered to pay a spread of between 9.5% and 10%.

Making these the latest set of cat bond notes issued in 2023 to look likely to price at or below the bottom of their initial spread guidance.

Still, the multiple-at-market will be much higher than Security First’s previous cat bond issuances, reflecting the harder reinsurance rate environment.

But, it is becoming notable that a number of Florida exposed cat bonds are pricing lower in recent weeks, suggesting a slight moderation of the cat bond rate environment that bodes well for issuance levels as more carriers continue to look to the market for reinsurance as mid-year approaches.

You can read all about this new First Coast Re IV Ltd. (Series 2023-1) catastrophe bond, as well as details on over 900 other cat bond transactions in the extensive Artemis Deal Directory.