Texas Farm Bureau gets debut Fish Pond Re cat bond at upsized $255m

First-time catastrophe bond sponsor the Texas Farm Bureau Insurance Companies has secured a strong result with its debut catastrophe bond issuance Fish Pond Re Ltd. (Series 2024-1), Artemis understands, with the upsized target for $255 million of reinsurance achieved and pricing finalised at the bottom of guidance.

Texas Farm Bureau Insurance is the insurance operation of Texas’s largest farm organisation, the Texas Farm Bureau, a non-profit focused on its members from the agricultural community.

The insurer entered the cat bond market for its first time at the start of December, seeking $200 million or more in named storm reinsurance protection through this Fish Pond Re 2024-1 cat bond.

As we then reported earlier this week, the target size for the cat bond was raised, with between $225 million and $255 million of reinsurance sought from this cat bond deal.

At the same time, we learned that the price guidance narrowed and was lowered towards the bottom-end.

We are now told that the notes have been successfully priced and that Texas Farm Bureau has secured that upsized $255 million of reinsurance protection from the cat bond market.

So, these now priced Fish Pond Re Ltd. Class A tranche of Series 2024-1 catastrophe bond notes will provide Texas Farm Bureau Insurance and its subsidiaries with a confirmed $255 million of collateralized reinsurance against losses from named storms in the state of Texas, on an indemnity trigger and per-occurrence basis, over a three year term to the end of 2026.

The $255 million of notes will have an initial expected loss of 0.112% and were first offered to cat bond investors with spread price guidance in a range from 4% to 4.5%. As we said, that price guidance was lowered and the range narrowed, to an updated 4% to 4.25% earlier this week.

Now, we’ve learned that the notes priced today, for a spread of 4% to be paid to investors.

So that is very strong execution for a first-time cat bond sponsor, upsizing its debut Fish Pond Re cat bond issuance, while securing the reinsurance protection it provides at the lowest-end of initial spread guidance.

You can read all about Texas Farm Bureau Insurance’s first catastrophe bond, this Fish Pond Re Ltd. (Series 2024-1) transaction, in our Deal Directory, where you can analyse details of almost every catastrophe bond ever issued.