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Beazley secures $140m of reinsurance with PoleStar Re cyber cat bond


Beazley has now successfully priced its debut 144A cyber catastrophe bond issuance, with the PoleStar Re Ltd. (Series 2024-1) deal confirmed to provide the company with $140 million of cyber reinsurance, while the notes priced within but at the top-end of initial guidance.

Beazley cyber catastrophe bond - PoleStar ReAs well as being Beazley’s debut cyber catastrophe bond, this is the company’s first 144A cat bond ever to be priced, given the firm’s debut property cat bond, the Fuchsia 2023-1 deal, has yet to reach that stage in its issuance and the cyber cat bond reached pricing first.

Notable is the fact Beazley had started marketing this debut cyber cat bond, the PoleStar Re deal, at $75 million of notes in size.

We were then told that Beazley had updated the size to become a $130 million offering, a 73% increase, while the pricing was lifted to the top-end of guidance.

After which we were first to report that Beazley lifted the target size again, to $140 million.

Now, we’re told Beazley has priced the PoleStar Re cat bond to provide that upsized $140 million of cyber reinsurance.

That’s an 87% increase to the initial target, reflecting strong execution for Beazley and strong investor appetite for this now second 144A cyber catastrophe bond to reach pricing.

Cat bond investors have responded extremely positively to Beazley’s need for cyber reinsurance protection, which sends a strong signal to other potential cyber cat bond sponsors.

This PoleStar Re cyber cat bond issuance is now confirmed to provide Beazley a $140 million source of broad cyber reinsurance coverage from the capital markets, covering it against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

The cyber reinsurance coverage from the PoleStar Re cat bond is structured on an indemnity trigger and per-occurrence basis, to run across a two year term through calendar year’s 2024 and 2025.

The now confirmed as $140 million of coverage will attach from $500 million of losses to Beazley after a cyber event, covering a share of losses to $800 million.

The $140 million of PoleStar Re cyber cat bond notes on offer have an initial expected loss of 1.26% and were first marketed to cat bond funds and investors with spread price guidance in a range from 12% to 13%.

As we later reported, that price guidance was fixed to the top-end of the range at 13% and we understand that is where the notes have now been successfully priced.

Importantly for Beazley, this first Rule 144A cyber cat bond from the company, which is now the largest cyber cat bond deal so far, will more than replace the aggregate $81.5 million of cyber reinsurance protection from its three private cyber cat bonds, the Cairney series of insurance-linked securities (ILS), that all mature at year-end.

You can read all about this PoleStar Re Ltd. (Series 2024-1)  catastrophe bond transaction to our Deal Directory, where you can analyse details of almost every cat bond ever issued.

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