The first catastrophe bond for the Texas FAIR Plan Association (TFPA) has now been finalised to provide the targeted $200 million of multi-peril reinsurance protection, while the notes from this Bluebonnet Re Ltd. (Series 2025-2) issuance have been priced at the upper-end of guidance, Artemis has learned.
This first cat bond for the Texas FAIR Plan began marketing back at the mid-point of April with a goal to secure $200 million in multi-year and fully-collateralized reinsurance from the capital market.
As we reported in our first update on this deal, the target size remained at the $200 million level, while the price guidance had been lifted to the top-end of the initial guidance range.
Now, we’ve learned that the targeted $200 million of reinsurance limit has now been secured for the TFPA, with this Bluebonnet Re 2025-2 cat bond now priced at the upper-end of guidance level.
The now confirmed as $200 million of Bluebonnet Re Series 2025-2 Class A catastrophe bond notes will protect the TFPA with reinsurance against losses from named storms, severe thunderstorms and wildfires in the State of Texas, all on an indemnity trigger and per-occurrence basis and running across a two-year term to early June 2027.
The $200 million of Bluebonnet Re Series 2025-2 Class A catastrophe bond notes come with an initial expected loss of 4.07% and were initially offered to catastrophe bond funds and investors with spread price guidance in a range from 11% to 12%.
The pricing was then updated to guidance at the upper-end, which is where the notes have now been priced for a spread of 12% to be paid to cat bond investors, we understand.
Meaning the Texas FAIR Plan will now benefit from the targeted $200 million of reinsurance protection from the capital markets with this first catastrophe bond to protect the Association, providing a welcome diversification within its reinsurance tower and locking in the coverage for a two-year term.
As we also reported yesterday, the manager of the TFPA, the Texas Windstorm Insurance Association (TWIA), secured an upsized $550 million of reinsurance for its tower from the Bluebonnet Re 2025-1 issuance that has been in the market at the same time.
Read all about this new Bluebonnet Re Ltd. (Series 2025-2) catastrophe bond for the Texas FAIR Plan Association and every other cat bond transaction in the Artemis Deal Directory.
