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The deal will be fronted by Hannover Re but will provide coverage to the state backed carrier.
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The Orlando insurer is the second Floridian to make its cat bond debut this year.
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ILS managers said strong appetite for more liquid investments made bondholders want to hang on to their securities in Q1. -
Pockets of the distressed Florida market are still expected to face a challenging renewal, but much of the remediation was carried out last year.
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Less than a month ago, the insurer said it would recover $184mn of losses from an earlier Sanders Re deal.
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The state insurer will raise $800mn-$950mn after initially launching with a modest $500mn target.
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Spreads have fallen 14% on a weighted average basis on new deals marketed in the quarter to date.
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Spreads fell by 11%-33% during the marketing process, with several of the deal’s layers pricing well below revised guidance.
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In total, the changes will lift the exhaustion point on its reinsurance by $779mn from last year, although some gaps remain as its cat bond recovery rose to $195mn.
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The cat bond will renew an expired 2017 multi-peril deal for the US insurer.
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Spreads are back in line with early 2019 levels after strong new issuance was not enough to meet a rising wave of investor demand, the broker said.
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The ILW deal will offer a spread of 1775-1850 basis points (bps), including a wide range of perils and notably high coupon for the ILS market.
