We’re told that American Integrity Insurance Company has for the second time lifted the goal size for its recent catastrophe bond, with now $305 million in collateralized named storm reinsurance protection sought from the Integrity Re Ltd. (Series 2024-1) issuance, which could be a greater than doubling of the dimensions of this deal since its launch to investors.
American Integrity returned to the catastrophe bond market earlier this month, with an initial goal to secure not lower than $150 million in collateralized named storm reinsurance protection for its exposures across three southeast US states.
As we then reported this morning, the goal size of this issuance was raised to not lower than $295 million, while the price guidance was lowered across all tranches of the cat bond deal.
Now, our sources have told us that the goal size has been increased further, with now $305 million of named storm reinsurance being sought by American Integrity.
Full details of this and every cat bond sponsored by American Integrity is likely to be present in our Deal Directory.
When the deal was first being marketed to investors, American Integrity was looking for $150 million or more in indemnity based named storm reinsurance across the covered states of Florida, Georgia and South Carolina, across two risk periods, coming on risk from June 2024, with the coverage running to the tip of May 2026.
4 tranches of notes are to be issued, the first of which is in a position to provide annual aggregate reinsurance and the next three will provide per-occurrence reinsurance that can cascade down after events erode lower layers of the insurers’ reinsurance tower, harking back to its FHCF coverage.
The mix layer of notes from this cat bond deal were originally a $50 million tranche of Class A notes, which we later learned had been upsized to $120 million, to cover the whole layer of the mix risk tower.
The $120 million of Class A notes have an initial expected lack of 0.22% and were first marketed with spread guidance in a variety from 12% to 13%, which was later reduced to between 11% and 12%, but we’re now told has been lowered again and narrowed to between 10.5% and 11%.
The Class B tranche of notes are still positioned at $50 million in size and may provide per-occurrence protection, with an initial expected lack of two.35%. These notes were first offered with spread guidance in a variety from 14% to fifteen%, which was then reduced to 13.5% to 14% and we’re now told has been reduced again to 13.25% to 13.5%.
The Class C tranche of notes in the meanwhile are targeted to be $60 million in size, we’re told. These also provide per-occurrence protection, with an initial expected lack of two.38% and proceed to be offered with spread pricing of 17%.
The last word tranche of Class D notes were originally positioned to be $50 million in size, but in the meanwhile are targeted on the raised $75 million goal. They’ve an initial expected lack of three.56% and were first offered with spread guidance in a variety from 22% to 23%, which was later narrowed to a recent range of twenty-two.5% to 23% and we’re now told has been fixed on the 23% upper-end of intiial guidance.
The transaction is now looking set to upsize by greater than 100%, while the pricing has moved down further on some layers, aside from the riskiest Class D notes, reflecting cat bond investor’s having stronger appetite for risk from higher layers of reinsurance towers.
You most likely can read all about this recent Integrity Re Ltd. (Series 2024-1) catastrophe bond and every cat bond deal throughout the Artemis Deal Directory.