10 hours ago
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RenaissanceRe has increased the target size for its latest catastrophe bond, with the company now seeking $300 million in multi-peril retrocession from the Mona Lisa Re Ltd. (Series 2025-1) issuance, while the price guidance has fallen for both tranches of notes.
RenaissanceRe, the Bermuda based reinsurance company and third-party capital manager, returned to the catastrophe bond market earlier this month, seeking $250 million of retrocessional reinsurance protection for its own portfolio and that of its flagship partner capital vehicle DaVinci Re.
Reflecting positive catastrophe bond market conditions and strong cat bond investor appetites at this time, the Mona Lisa Re 2025-1 cat bond looks set to be the latest to increase in size and to see its pricing fall to the bottom of initial guidance, or lower.
Execution of industry loss triggered cat bonds has been particularly strong, with attractive pricing being secured, as almost every deal has grown and seen its spread above expected loss tighten.
This Mona Lisa Re 2025-1 catastrophe bond will provide RenRe and DaVinci Re with retrocession across both three and four year terms against losses caused by U.S., Puerto Rico, U.S. Virgin Islands, and D.C. named storm and earthquake events, as well as protection for Canadian earthquakes, all on an industry loss index trigger and annual aggregate basis.
The target size has been raised for each of the two tranches of Series 2025-1 notes that are being offered, meaning the deal has increased from the initial $250 million target, to now $300 million, we are told.
A Class A tranche of notes were initially targeted to provide $125 million of protection, but this has now increased to $150 million. This is the four-year tranche, with an initial expected loss of 3.66% and the Class A notes were first offered to cat bond investors with price guidance in a range from 8.5% to 9.25%, but this has now fallen to a revised range of 8% to 8.5%, our sources told us.
The Class B tranche are a little riskier and also targeted $125 million of protection to begin, but have now also grown to $150 million. These notes have a three-year term, coming with an initial expected loss of 4.84% and were initially offered to cat bond investors with price guidance in a range from 11% to 11.75%, but that has also fallen to a revised price range of 10.5% to 11%, we understand.
As a result, RenaissanceRe looks set to be another catastrophe bond sponsor to benefit from strong investor appetites and market conditions, to upsize and price down its latest retro cat bond deal.
You can read all about this Mona Lisa Re Ltd. (Series 2025-1) catastrophe bond from RenaissanceRe and every other cat bond ever issued in our extensive Artemis Deal Directory.
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