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The Class 10 zero-coupon structure notes have been withdrawn.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
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Subrogation recoveries from 2017-18 Californian wildfire losses drive capital releases.
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Earlier, the carrier added a pandemic exclusion to the annual aggregate bond.
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The spreads on the new deal are set 17 percent higher than a similar 2019 USAA bond.
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Pricing for both tranches of the deal stayed within the midpoint of the initial target range
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The Texas-based military insurer is offering double-digit premiums across two tranches of its second bond of the year.
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Nationwide, USAA and Allstate are other national carriers with significant property catastrophe market shares in the states.
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This will have implications for Allstate, State Farm, USAA and other insurers which have sued the utility over Camp Fire losses.
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USAA is set to raise $135mn from the deal, which did not specify a target at launch.
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The loss tally for catastrophe bonds impacted by the 2017 disaster events has now climbed to $1.1bn, according to January pricing sheets.
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USAA’s losses put it on track to recoup another $82mn from its cat bonds, following a projected $182mn recovery in 2017.
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Cat bond investors have varying rights to share in subrogation benefits, as it has emerged following the Californian wildfires of 2017-2018.
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The utility expects to source enough cash to finance its ongoing operations.
