Security First raises First Coast Re IV 2025 cat bond target, now up to $250m

Artemis has learned that Security First Insurance Company, a specialist Florida domestic homeowners insurer, has now raised its target for named storm reinsurance from its latest visit to the catastrophe bond market, now aiming to secure up to $250 million of protection from its new First Coast Re IV Ltd. (Series 2025-1) issuance, the company’s sixth catastrophe bond.

Security First has been utilising catastrophe bonds to access capital markets sources of fully-collateralized reinsurance capacity since its debut First Coast Re cat bond in 2016.

The insurer has sponsored five First Coast Re cat bonds in total, three issued out of Bermuda and two from Singapore.

As we reported in late January, Security First was back in the catastrophe bond market seeking $210 million in named storm reinsurance with this new First Coast Re deal.

This new First Coast Re IV Ltd. (Series 2025-1) cat bond is being issued using Bermuda as a domicile again and will become the sixth cat bond from Security First we have listed in our Deal Directory.

Special purpose insurance company First Coast Re IV Ltd. will issue two tranches of Series 2025-1 notes, that will be sold to investors and the proceeds used to collateralize protection for the sponsor.

The Class A tranche of Series 2025-1 notes were originally $60 million in size, but are now being pitched at an upsized range of between $60 million and $100 million, we are told.

The Class A notes have an initial attachment probability of 1.41%, an initial base expected loss of 1.30% and they were initially being offered to cat bond funds and investors with spread price guidance in a range from 7.75% to 8.5%. That price guidance has now dropped, with a new tighter range of 7% to 7.75%.

We have also been told that the size guidance for the larger $150 million Class B tranche of notes has not changed.

The tranche of Class B notes have an initial attachment probability of 2.82%, an initial base expected loss of 2.25%, and they were originally being marketed with price guidance in a range from 8.75% to 9.5%. That price guidance has now lowered, with a new tighter range of 8% to 8.75%.

So, with its latest First Coast Re IV cat bond, Security First looks to be targeting a meaningful upsizing, while seeking pricing at the bottom ends of initial guidance or even lower.

As a reminder, you can read all about this new First Coast Re IV Ltd. (Series 2025-1) catastrophe bond, as well as details on over 1,000 other cat bond transactions in the extensive Artemis Deal Directory.