The value guidance range has been lowered for a second time for the most recent catastrophe bond to be sponsored by Prologis, Inc., the logistics, warehousing and supply-chain focused real estate owner and investor, while the goal size continues to be unchanged at $95 million for the Logistics Re Ltd. (Series 2024-1) US earthquake cat bond issuance.
We had reported back at the tip of September that Prologis, Inc. was back and in search of its second catastrophe bond issuance, in search of a renewal of its soon to mature first deal.
Prologis had previously secured $95 million of multi-year, earthquake focused property catastrophe insurance protection through the successful issuance of a Logistics Re Ltd. (Series 2021-1) cat bond within the fourth-quarter of 2021, which is now scheduled to mature in December of this yr.
The $95 million of Series 2024-1 Class A notes Logistics Re is issuing will provide Prologis with a just over three-year source of US earthquake insurance protection on an indemnity and per-occurrence basis, with maturity slated for mid-December 2027.
Initially, with a $95 million goal to exchange the soon to mature coverage fully, although with changes to the exposure base evidenced in the upper expected lack of the 2024-1 notes, the Logistics Re 2024-1 catastrophe bond was offered with price guidance of between 6.75% and seven.25%.
The Logistics Re Series 2024-1 Class A notes include an initial attachment probability of three.1% and an initial expected lack of 2.6%.
As we reported earlier this week, the worth guidance was then lowered, with a recent range of 6.25% to six.75% being offered.
Now, we’re told that the worth guidance has fallen even further, with a variety of 6% to six.25% offered to investors.
Which suggests very strong execution into the catastrophe bond marketplace for Prologis’ second issuance.
While this might surprise some given the market is facing some uncertainty and losses because of recent hurricane activity, this being a diversifying peril, the primary issuance out of the blocks after the everyday seasonal lull, and the actual fact there’s money on-hand at some cat bond fund managers, has all made it a conducive market to issue into.
It’s also price considering that, while a loss event like hurricane Milton might lead to a desire for higher returns locally in Florida, within the scope of the whole cat bond promote it is just not going to have a significant effect, with the losses from the storm absorbed easily into one or two months of seasonality loaded returns for the vast majority of ILS strategies.
Hence, strong execution with this deal is just not surprising even within the context of potential Milton losses.
You’ll be able to read all concerning the Logistics Re Ltd. (Series 2024-1) catastrophe bond and each other cat bond issuance in our extensive Artemis Deal Directory.