1 month ago
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NN Group, or Nationale-Nederlanden, has now successfully secured its targeted €75 million of collateralised reinsurance from the new Orange Capital Re DAC (Series 2024-1) catastrophe bond issuance, with the notes pricing around 11% below the initial guidance mid-point.
NN Group is a life and property-casualty insurance underwriter based in the Netherlands, underwriting risks largely in that country and some others close to it.
The insurer returned to the catastrophe bond market with its third deal, which is a renewal of sorts for its debut Orange Capital Re DAC 2021-1 issuance that provides reinsurance coverage through to the end of this year.
NN Group had also sponsored a second cat bond in 2023, securing a further €75 million of reinsurance coverage with the Orange Capital Re DAC (Series 2023-1) issuance, that sits lower down in its reinsurance tower.
As we were first to report on October 22nd, NN Group had returned to the catastrophe bond market in 2024, looking to secure €75 million or more in collateralised reinsurance to cover European catastrophe perils.
We then published an update on October 31st, that the price guidance for the new cat bond had been reduced, with the updated range sitting below the initial one that was marketed.
Then, on November 4th, we reported that NN Group’s new Orange Capital Re 2024-1 cat bond had seen its spread price guidance reduced further, with an updated range offered that sat below the already updated one.
Now, we’re told that NN Group has successfully priced its new Orange Capital Re 2024-1 cat bond to provide it the targeted €75 million in reinsurance, while the notes have priced at the bottom-end of the reduced guidance.
We’ve been reporting that the catastrophe bond investor community is in good shape, with some fund managers having excess cash on hand to deploy into new deals and any diversifying peril opportunities, such as this, are experiencing very strong investor appetite and execution right now, making this an opportune time for cat bond sponsors to consider returning to the market.
As a result, it is now confirmed that Orange Capital Re Designated Activity Company (DAC) will issue a single tranche of €75 million Class A Series 2024-1 catastrophe bond notes to provide NN Group with catastrophe reinsurance covering windstorm and severe thunderstorm risks in Belgium and the Netherlands, although with the exposure mainly concentrated on the latter.
The new Orange Capital Re 2024-1 cat bond will provide NN Group reinsurance on an indemnity trigger and per-occurrence basis, running across a four year term, from January 2025 to the end of 2028.
The Series 2024-1 Class A notes that are being issued by Orange Capital Re DAC come with an initial expected loss of 2.7% and were at first offered to cat bond investors with price guidance in a range from 6.5% to 7%.
As we then reported, the price guidance was first updated to a new and lower range, for pricing of between 6.25% and 6.5%, and then saw a further reduction in price guidance, to a range of 6% to 6.25%.
Now, we’ve learned that the notes have been successfully priced to pay investors a spread of 6%, which is 11% below the mid-point of the first guidance range that was offered.
As we said, this pricing reflects the strong investor demand for cat bond investment opportunities outside of US wind and also the cash-rich nature of some fund strategies in the space that had freed some capital up in advance of the Atlantic hurricane season.
You can read all about the Orange Capital Re DAC (Series 2024-1) catastrophe bond and every cat bond deal ever issued in our Artemis Deal Directory.
English (US) ·