USAA
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Spreads on USAA’s latest deal priced below comparative issuances in 2023-2024. -
Fully placed, this would equate to $275mn on the per-occurrence tower and $675mn on agg.
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The sponsor is estimating a loss of ~$300mn in relation to one of last month’s US tornado events.
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The issuance is split across three tranches with varying degrees of risk.
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The carrier has recognised two separate losses for the Palisades and Eaton fires.
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Its Class 13 and 14 notes priced roughly at the midpoint of expectations.
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Pricing on the bond has settled at the lower end of initial guidance.
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The bond will provide coverage for weather events in all 50 US states and the District of Columbia.
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The reinsurer is seeking $125mn in Class 13 notes and $275mn in Class 14 notes.
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The bond, which was first announced in October 2022, had an initial target size of $195mn.
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The multi-peril bond will cover all 50 US states and the District of Columbia.
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The market is characterised by rising prices and shrinking deal sizes as investors pick and choose over which bonds to back.
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The shifts reflect wider cat bond market challenges and changeability.
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The bond will provide coverage up to 2026, extendable to 2029.
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The Residential Re transaction is being offered with significantly higher spreads than a year ago in a sign of repricing benchmarks after Hurricane Ian.
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Cat bond spreads settled 11% above sponsor targets as many deals were scaled back or parked.
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The Class 10 zero-coupon structure notes have been withdrawn.
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The transaction includes a notably high-risk target layer amongst five tranches.
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The carrier typically places an occurrence and an aggregate deal in the ILS market each year.
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Some of the insurer’s bonds were among those modestly marked down after Ida.
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Spreads fell by 11%-33% during the marketing process, with several of the deal’s layers pricing well below revised guidance.
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Projected spreads on the deal range from 300bps at the bottom end of the lowest risk notes to 1000bps at the top of the highest-risk layer.
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Markdowns have wiped more than $220mn off the value of $1.6bn of aggregate cat bonds benefitting major US insurers after the Texas Big Freeze.
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Spreads on two of the three tranches fell below the range first offered to investors
