Tower Hill Insurance Exchange has increased the target size for what will be its second catastrophe bond, lifting the Winston Re Ltd. (Series 2025-1) offering by 75% to provide $175 million in Florida named storm reinsurance protection.
Tower Hill returned to the cat bond market for the second time in January, with a $100 million target size for this Winston Re 2025-1 issuance.That target has now been increased, to $175 million, while at the same time we’re told the price guidance has been lowered for the cat bond notes.
A year ago, Tower Hill Insurance Exchange secured $400 million of reinsurance from its debut Winston Re 2024-1 catastrophe bond, with that transaction doubling in size while marketing thanks to strong investor demand.
The Florida homeowners and commercial property insurance underwriter is aiming to build-out more capital markets backed reinsurance protection within its core Florida-focused tower, with this second Winston Re cat bond.
Winston Re Ltd. will issue a single tranche of Series 2025-1 Class A notes to provide Tower Hill with 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 now $175 million tranche of Series 2025-1 Class A notes Winston Re is set to 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%.
We’re also told the price guidance range has been updated at a lower level, with a spread of between 6.5% and 7% being offered to investors.
Which brings the indicative pricing down even lower year-on-year, compared to the 2024 issuance from Tower Hill.
As we explained in our last article, the Winston Re 2024-1 Class A tranche of notes had an initial expected loss of 1.56% and priced for a spread of 10.25%, so a considerably higher multiple compared to where these 2025-1 notes are now headed.
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.
