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The bond includes two layers protecting against annual aggregate and occurrence losses. -
The bond is structured with dual annual aggregate and per-occurrence index triggers.
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The deal has secured $100mn of limit for insurer American Family, rather than pushing out to a $125mn top-end target.
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The insurer will pay a 13.5% coupon for the US coverage.
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The market is characterised by rising prices and shrinking deal sizes as investors pick and choose over which bonds to back.
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The new bond is Sompo’s first to feature US risk and uses a dual annual aggregate and per occurrence trigger.
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The deal’s price at 650 basis points is offering a multiple of 12.5x on the sensitivity case expected loss.
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The Liberty Mutual bond has priced at the top end of a range of 8.5%-9.25%.
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The B notes priced above guidance and the A notes at the top end of the initial guidance range.
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The bond will provide named storm and quake coverage in the US, Canada and the Caribbean.
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Price guidance on the Class A notes represents a step change compared to a similar deal placed in March.
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The Texas Windstorm Insurance Association’s board has heeded Gallagher Re’s advice to move fast to replace its expiring cat bond.
