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The insurer priced the deal at the lower end of its target range. -
First Coast Re 2021-1 is the insurer’s fourth cat bond and set an early start to Florida renewals.
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The bond’s size grew 150% during the marketing process and pricing fell by 13% amid strong investor demand.
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More than $1bn came off risk in February this year.
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Pricing has also dropped below the initial range offered to investors.
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Tighter cat bond spreads will prevail until issuance catches up with investor demand, the firm forecast.
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The deal will partially replace a $480mn bond that comes off risk at the end of March and is the first for the carrier to mix US and Japanese risks.
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Trading data showed the market delivered on liquidity in the midst of the pandemic panic.
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The Floridian insurer aims to renew just over a third of its private reinsurance placement in cat bond cover.
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Markdowns have wiped more than $220mn off the value of $1.6bn of aggregate cat bonds benefitting major US insurers after the Texas Big Freeze.
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The insurer is turning to the ILS market after a busy year for Florida deals in 2020.
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The deal would add to $200mn of ongoing cat bond cover for the insurer.
