1 week ago
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RenaissanceRe has for a second time increased the target size for its latest catastrophe bond, with the company now seeking $350 million of multi-peril retrocessional reinsurance from the Mona Lisa Re Ltd. (Series 2025-1) issuance.
RenaissanceRe, the Bermuda based reinsurance company and third-party capital manager, returned to the catastrophe bond market earlier in November, seeking $250 million of retrocessional reinsurance protection for its own portfolio and that of its flagship partner capital vehicle DaVinci Re.
As we later reported, the target size of this Mona Lisa Re 2025-1 cat bond was increased to $300 million, while the price guidance for the two tranches of notes was also lowered.
Now, sources have told us that the size target has been lifted again, with now $350 million of protection sought from the new cat bond, while the price guidance has been lowered and fixed at the bottom-end of the already reduced guidance.
This Mona Lisa Re 2025-1 catastrophe bond will ultimately provide both RenRe and its DaVinci Re joint-venture reinsurer 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.
With the target size now raised twice for each of the two tranches of Series 2025-1 notes that are being offered, the deal now looks set to increase from the initial $250 million target, to now $350 million, we are told.
A Class A tranche of notes were initially targeted to provide $125 million of protection, which was first increased to $150 million and now again to $175 million, we understand. This is a four-year tranche of notes, with an initial expected loss of 3.66%. The Class A notes were first offered to cat bond investors with price guidance in a range from 8.5% to 9.25%, but that first fell to a revised range of 8% to 8.5%, and now the spread offered has been fixed at the low-end of 8%, we understand.
The Class B tranche are a little riskier and also targeted $125 million of protection to begin, but first grew to $150 million and now again have been upsized to a targeted $175 million as well. These notes have a three-year term, coming with an initial expected loss of 4.84%. They were initially offered to cat bond investors with price guidance in a range from 11% to 11.75%, which later fell to a revised price range of 10.5% to 11%, and now have also seen the spread fixed at the low-end at 10.5%
RenaissanceRe is benefiting from the strong catastrophe bond investor appetites and market conditions we’re currently seeing, now looking certain to both upsize and meaningfully price down its latest retro cat bond deal.
Execution of industry loss triggered cat bonds such as this has been particularly strong of late, with attractive pricing being secured by sponsors and almost every issuance growing while seeing its spread above expected loss tighten.
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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