1 month ago
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We’ve learned that, now for the second time, NN Group’s new Orange Capital Re DAC (Series 2024-1) catastrophe bond issuance has seen its price guidance range fall, with the company looking set for strong execution of its latest cat bond deal.
As Artemis reported on October 22nd, NN Group has returned to the catastrophe bond market looking to secure €75 million or more in collateralised reinsurance to cover European catastrophe perils.
We then reported last week, on October 31st, that the price guidance had been reduced, with the updated range sitting below the initial one that was marketed.
Now, we’ve learned that NN Group’s new Orange Capital Re 2024-1 cat bond has seen its spread price guidance reduced again, and again an updated range is now being offered, sitting below the already updated one.
As we’ve been explaining, the catastrophe bond investor community is in good shape and some fund managers have excess cash on hand to deploy into new deals.
As a result, any diversifying peril opportunities away from US wind are experiencing very strong execution right now, making this an opportune time for cat bond sponsors to consider returning to the market.
NN Group is set to be a beneficiary of the strong investor appetite for catastrophe bond investments, as well as market dynamics at this time.
Having escaped significant impact from recent hurricanes, the cat bond market is firing on all cylinders into the final two months of the year.
With this latest cat bond from the insurer, Orange Capital Re Designated Activity Company (DAC) will issue a single tranche of €75 million or more 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 mostly concentrated on the latter.
The new Orange Capital Re 2024-1 cat bond will provide reinsurance on an indemnity trigger and per-occurrence basis, running across a four year term, from January 2025 to the end of 2028.
At this time, we’re told again that the issuance remains at €75 million in size.
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 first offered to cat bond investors with spread price guidance in a range from 6.5% to 7%.
As we reported last week, that price guidance was first updated to a new and lower range, for pricing of between 6.25% and 6.5%.
Now, we’ve learned from sources of a further reduction in price guidance, with a range of 6% to 6.25% the latest range on offer.
As a result, this Orange Capital Re 2024-1 cat bond could price well-below the initial guidance for NN Group, reflecting strong investor demand for investment opportunities outside of US wind and also the cash rich nature of some fund strategies that had freed some cash in advance of the wind 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.
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