Pricing has tightened further for 2 of the tranches of notes being issued as a part of Liberty Mutual’s recent Mystic Re IV Ltd. (Series 2025-1) catastrophe bond, because the insurer looks set to be one other to learn from strong investor demand and powerful cat bond execution in the first market.

Liberty Mutual Insurance returned 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.

This can 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 the moment, just two tranches of per-occurrence notes had been given size guidance while market appetite for an annual aggregate layer was still being assessed, it seemed.

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

Now, we’re told the dimensions goal has remained static, but price guidance for 2 of the tranches of notes on offer has fallen further, indicating even stronger execution for the sponsor.

Mystic Re IV Ltd. will issue three tranches of Series 2025-1 notes to offer Liberty Mutual with $325 million in multi-peril collateralized reinsurance protection on each a per-occurrence and annual aggregate indemnity trigger basis, across a 3 calendar 12 months term, from January 1st 2025.

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

At this latest update there have been no changes to the dimensions of the cat bond tranches Mystic Re IV goes to issue, but pricing has tightened again for the 2 occurrence tranches of notes.

The $125 million tranche of Class A notes will provide indemnity per-occurrence reinsurance, have an initial expected lack of 1.41%, and 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%, but has now fallen again to a set 4% spread, sources told us.

The $100 million Class B tranche may also provide indemnity per-occurrence reinsurance cover, but have an initial expected lack of 5.16%, and were first offered with spread price guidance in a variety from 11% to 11.75%, first fell to a revised range of 10.5% to 11%, but have now seen the guidance reduced again and tightened to 10.25% to 10.5%.

The ultimate Class C tranche of notes will provide Liberty Mutual with $100 million of indemnity annual aggregate reinsurance protection. They’ve an initial expected lack of 4.06%, and were first offered with spread price guidance in a variety from 13.5% to 14.5%, but at the primary update the spread was fixed at 14% for this aggregate layer and we’re told that is where it has stayed.

That is the primary aggregate cat bond tranche to have been sponsored by Liberty Mutual, indicating the power of the cat bond market to service the combination reinsurance protection needs of major insurers, if the structure and terms are right.

As we reported recently, there’s 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’ll be able to 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.