Tower Hill Insurance Exchange, a Florida homeowners and business property insurance underwriter, has returned to the catastrophe bond marketplace for its second time, searching for $100 million or more in Florida named storm reinsurance from this Winston Re Ltd. (Series 2025-1) issuance.
A 12 months ago, Tower Hill Insurance Exchange secured $400 million of reinsurance from its debut Winston Re 2024-1 catastrophe bond, with that transaction doubling in size while marketing due to strong investor demand.
For 2025, Tower Hill is trying to build-out more capital markets backed reinsurance protection inside its core Florida-focused tower.
For its second cat bond, Tower Hill is again using its Bermuda based special purpose insurance company named Winston Re Ltd.
Winston Re Ltd. will issue a single tranche of Series 2025-1 Class A notes that will likely be sold to investors and the proceeds used to collateralize a reinsurance agreement between the SPI and Tower Hill.
Much like its debut cat bond, we’re told by sources that this Winston Re 2025-1 issuance will provide Tower Hill with reinsurance protection against named storm losses in Florida.
The protection will likely be structured on an indemnity trigger and per-occurrence basis, running across a 3 hurricane season term, starting June 2025 and with maturity due in February 2028.
With an initial goal for $100 million of protection from its second cat bond, it’s going to be interesting to see if Tower Hill again looks to maximise this chance by upsizing this issuance.
The $100 million tranche of Series 2025-1 Class A notes Winston Re is offering will provide Tower Hill with reinsurance protection from an initial attachment point of $925 million to exhaustion at $1.125 billion of losses, we’re told.
That offers the notes an initial attachment probability of 1.55%, an initial base expected lack of 1.42% and these notes are being offered to investors with spread guidance in a spread from 7% to 7.5%.
We will compare these 2025-1 notes to those from the prior 12 months issuance, when the 2024-1 Class A tranche had an initial expected lack of 1.56% and priced for a selection of 10.25% and the riskier 2024-1 Class B notes had an expected lack of 1.97% and priced to pay investors a selection of 11.75%.
So clearly the pricing appears lower this time around, which is unsurprising given the lower spreads of issuance seen through the fourth-quarter of last 12 months and into January.
As such, it’s going to be interesting to see where this latest cat bond for Tower Hill settles, in pricing terms.
You may read all about this Winston Re Ltd. (Series 2025-1) within the extensive Artemis Deal Directory that features details on almost every cat bond ever issued.