Tower Hill Insurance Exchange has now successfully priced its second catastrophe bond transaction, securing the 75% upsized target of $175 million in Florida named storm reinsurance protection from the Winston Re Ltd. (Series 2025-1) issuance.
At the same time, we’re told the final pricing of the notes was at the low-end of the already reduced guidance range.Tower Hill ventured back to the cat bond market for its second time in January, with an initial $100 million target size for this Winston Re 2025-1 issuance.
Last year, Tower Hill Insurance Exchange secured its debut cat bond to provide $400 million of reinsurance, with that Winston Re 2024-1 transaction doubling in size while marketing thanks to strong investor demand.
The Florida homeowners and commercial property insurance underwriter was looking to build-out more capital markets backed reinsurance protection within its core Florida-focused tower, with this second Winston Re cat bond.
As we reported in our first update on this new deal, the target size was increased to $175 million, while at the same time the price guidance range was lowered for the cat bond notes.
Now, sources said that the upsized target of $175 million has been secured, with the notes pricing at the bottom of reduced guidance.
Which means that Winston Re Ltd. will now issue the single tranche of Series 2025-1 Class A notes to provide Tower Hill with $175 million in reinsurance protection against named storm losses in Florida, on an indemnity trigger and per-occurrence basis, running across a three hurricane season term, beginning June 2025 and with maturity due in February 2028.
The $175 million tranche of Series 2025-1 Class A notes Winston Re will issue come with an initial base expected loss of 1.42% and were first being offered to investors with spread guidance in a range from 7% to 7.5%.
That price guidance range was updated at a lower level, with a spread of between 6.5% and 7% then being offered to investors and we’re now told the pricing has been finalised at the low-end for a spread of 6.5%.
Recall that the Winston Re 2024-1 Class A tranche of cat bond notes issued a year ago had an initial expected loss of 1.56% and priced for a spread of 10.25%, so a considerably higher multiple at 6.6 times expected loss.
This new Winston Re 2025-1 cat bond will pay investors a multiple-at-market of just 4.6 times EL, which historically remains aligned with other Florida wind deals at similar levels of risk, but is a significant tightening from just one year ago, resulting in strong execution for Tower Hill from its second cat bond sponsorship.
You can read all about this Winston Re Ltd. (Series 2025-1) in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.
