1 day ago
3
Security First Insurance Company, a specialist Florida domestic homeowners insurer, is back in the catastrophe bond market for its sixth sponsorship, seeking $210 million in named storm reinsurance through a First Coast Re IV Ltd. (Series 2025-1) issuance.
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.
This new First Coast Re IV Ltd. Series 2025-1 catastrophe 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, we understand.
Security First is again working with global reinsurance firm Swiss Re for its latest cat bond, as it has previously, with the reinsurer set to act as a ceding reinsurer and enter into a retrocession agreement with the issuer, First Coast Re IV Ltd.
Swiss Re will then pass on the collateralized reinsurance protection to Security First, acting as a front to the capital markets for the Florida homeowners specialist.
The target size of the issuance will be for $210 million of notes to be issued across the two tranches, to provide Security First with a source of multi-year and collateralized reinsurance protection against Florida named storms.
Like Security First’s 2023 cat bond, we’re told this 2025-1 cat bond will feature an indemnity trigger and provide its coverage on a per-occurrence and cascading basis.
For Security First this ensures that the reinsurance will cascade down the tower if layers beneath are eroded, meaning less chance of gaps being left in its protection tower.
We’re told that the term of coverage will run from June 1st 2025, with maturity slated for early March 2028, so providing three full hurricane seasons of protection.
First Coast Re IV will issue a $60 million Class A tranche of Series 2025-1 notes that would attach their coverage above $640 million of losses, $40 million plus stated reinsurance, on a first-event basis, sources said.
Which gives the Class A notes an initial attachment probability of 1.41%, an initial base expected loss of 1.30% and they are being offered to cat bond funds and investors with spread price guidance in a range from 7.75% to 8.5%.
A $150 million Class B tranche of notes would attach their coverage above $390 million of losses on a first-event basis, $100 million plus stated reinsurance, we understand.
Giving the Class B notes an initial attachment probability of 2.82%, an initial base expected loss of 2.25%, while these notes are being marketed with price guidance in a range from 8.75% to 9.5%.
It’s good to see Security First returning and looking to expand on its multi-year reinsurance from the catastrophe bond market. The company’s $225 million First Coast Re III Pte. Ltd. (Series 2021-1) cat bond matures this March, so this seems at least a partial replacement for the hurricane protection that multi-peril deal provided.
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.
English (US) ·