Liberty Mutual has now secured the upsized goal of $325 million of fully collateralized reinsurance protection through its recent Mystic Re IV Ltd. (Series 2025-1) catastrophe bond, while the insurer benefited from high investor demand and powerful cat bond execution to cost the deal largely below initial guidance.

Liberty Mutual Insurance got here back to the cat bond market in November with an initial goal to secure not less than $225 million of indemnity based catastrophe reinsurance protection from the capital markets through this Mystic Re IV 2025-1 cat bond deal.

Once settled, this will likely be the tenth cat bond within the Mystic Re series from the corporate that we now have analysed and listed in our Deal Directory.

At launch to investors, only two tranches of per-occurrence notes had been given size guidance while market appetite for an annual aggregate layer was still being assessed.

In a primary update, the annual aggregate tranche of notes were also given a size goal, which took the full offering to $325 million in size, while at the identical time the pricing was lowered somewhat.

Then, in a second update, we learned that the scale goal had remained static, but price guidance for 2 of the tranches of notes on offer had fallen further, indicating even stronger execution for the sponsor.

Now, sources have told us that every one three tranches of Series 2025-1 notes to be issued by Mystic Re IV Ltd. have been successfully priced, to secure the upsized goal for $325 million of reinsurance, while pricing was largely below the initially marketed ranges.

Because of this, with the brand new cat bond now priced, Liberty Mutual has secured $325 million of multi-peril collateralized reinsurance cover on each a per-occurrence and annual aggregate indemnity trigger basis from the capital markets, across a 3 calendar yr term, from January 1st 2025.

This Mystic Re IV 2025-1 cat bond will provide Liberty Mutual with reinsurance protection against losses from named storms and earthquakes on an indemnity basis across the primary two tranches of notes, and people perils plus severe weather and wildfires from a 3rd annual aggregate tranche of notes, with the covered area for all three being parts of the US, Canada and the Caribbean.

A Class A tranche of notes will provide $125 million of indemnity per-occurrence reinsurance, with an initial expected lack of 1.41%. They were first offered with spread price guidance in a variety from 4.5% to five%, which was first lowered to an updated range of between 4% and 4.5%, after which fixed to pay investors a 4% spread, which is where sources tell us they’ve now been priced.

A Class B tranche will provide $100 million of indemnity per-occurrence reinsurance cover, with an initial expected lack of 5.16%. They were first offered with spread price guidance in a variety from 11% to 11.75%, which first fell to a revised range of 10.5% to 11%, but then saw the guidance reduced again and tightened to 10.25% to 10.5% and have now been priced on the lowest-end for a ten.25% risk interest spread to be paid, we understand.

The last Class C tranche of notes will provide Liberty Mutual with $100 million of indemnity annual aggregate reinsurance protection. They arrive with an initial expected lack of 4.06% and were first offered with spread price guidance in a variety from 13.5% to 14.5%, which was then fixed at 14% and we’re now told that is where the chance interest spread was priced for this aggregate layer.

As we’ve said, that is the primary aggregate cat bond tranche to have been sponsored by Liberty Mutual.

It’s an extra indication of the flexibility of the cat bond market to service the mixture reinsurance protection needs of major insurers, if the structure and terms are right.

As we reported recently, there may be growing evidence that investor appetite for aggregate notes has increased somewhat, albeit only on appropriate terms.

View details of each catastrophe bond sponsored by Liberty Mutual in our Deal Directory, where you possibly can filter the outcomes by trigger type and other features.

You’ll be able to read all about this Mystic Re IV Ltd. (Series 2025-1) catastrophe bond from Liberty Mutual and each other cat bond issued within the Artemis Deal Directory.