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Liberty Mutual prices $300m Mystic Re IV cat bond below initial guidance


Insurance firm Liberty Mutual has now successfully secured the upsized $300 million of reinsurance from its new Mystic Re IV Ltd. (Series 2024-1) industry-loss triggered catastrophe bond and the notes have now been priced below the initial guidance, we’re told.

liberty-mutual-logoAs we reported in November, Liberty Mutual returned to the catastrophe bond market seeking the ninth issuance in its Mystic Re series and its first to feature an industry-loss trigger since 2020.

At launch to cat bond investors, this new deal saw Liberty Mutual targeting $250 million of catastrophe retrocessional reinsurance protection to cover its peak peril exposures, from capital market investors.

The size guidance was later increased to $300 million, and we now understand that this has been successfully achieved, with the notes pricing today.

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

This Mystic Re IV Ltd. Series 2024-1 Class A cat bond notes will now provide Liberty Mutual with $300 million of collateralized reinsurance protection on a per-occurrence and weighted industry loss trigger basis across a three calendar year term, from January 1st 2024, covering losses from named storms and earthquakes affecting parts of the US, Canada and the Caribbean, we understand.

The $300 million of Series 2024-1 Class A notes feature, an initial modelled expected loss of 5.03% and were first offered to cat bond investors with price guidance in a range from 12.25% to 13%.

That spread guidance was subsequently lowered to 12% to 12.25% and sources now say that the notes priced today to pay a spread of 12%, so the bottom-end of the reduced range and below the initial price guidance range, indicating strong execution for sponsor Liberty Mutual.

As a result, Liberty Mutual has secured more industry-loss based retro reinsurance protection than it had originally been targeting, while this cover has now been secured at more attractive than originally anticipated pricing.

You can read all about this Mystic Re IV Ltd. (Series 2024-1) catastrophe bond from Liberty Mutual and every other cat bond issued in the Artemis Deal Directory.

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