Safety First Insurance coverage Firm, a specialist Florida home owners insurer, has seen the value steerage for its First Coast Re IV Ltd. (Series 2025-1) disaster bond issuance decline additional, whereas the Class A tranche of notes are actually focusing on $100 million in measurement, Artemis has discovered.
First Coast Re IV Ltd. (Series 2025-1) is the sixth First Coast Re cat bond sponsored by Safety First, and appears set to be the biggest with a goal measurement of $250 million.
In late January, we reported that the Floridian provider was focusing on $210 million in named storm reinsurance by way of its newest cat bond issuance, comprised of a $60 million Class A tranche of Collection 2025-1 notes and a $150 million Class B tranche of notes.
Final week, Artemis learned that Security First had lifted the target size of the issuance to up to $250 million, with the scale of the Class B notes unchanged, however the Class A tranche of notes upsized to focus on a variety of between $60 million and $100 million.
We’ve now discovered that the Class A tranche of notes will goal the higher $100 million measurement of the vary, and with the Class B notes nonetheless focusing on $150 million, First Coast Re IV Ltd. (Collection 2025-1) seems set to offer the insurer with $250 million in reinsurance protection.
The 2 tranches of notes can be offered to traders and the proceeds used to collateralize safety for the sponsor.
The now $100 million Class A tranche of notes have an preliminary attachment likelihood of 1.41% and an preliminary base anticipated lack of 1.30%. Initially, these notes had a diffusion worth steerage vary of seven.75% to eight.5%, which later fell to between 7% and seven.75%.
Sources have instructed Artemis that the value steerage vary for these notes has fallen additional to between 6.5% and seven%, which means that the Class A tranche of notes are set to cost beneath the preliminary unfold steerage vary.
On the mid-point of the most recent revised steerage, this is able to be a roughly 17% decline in unfold, and on the bottom-end of the vary, this is able to be a worth decline of 20%.
It’s an analogous story for the Class B tranche of notes, which had an preliminary unfold steerage vary of between 8.75% and 9.5%, later lowered to between 8% and eight.75%, with sources confirming that the unfold steerage vary has now been lowered once more to between 7.5% and eight% for these tranches of notes. The Class B notes are the riskier of the 2 with an preliminary attachment likelihood of two.82%, and an preliminary base anticipated lack of 2.25%.
For these notes, on the mid-point of that revised steerage, this is able to be a roughly 15% drop in unfold, and on the bottom-end of the vary, a worth decline of just about 18%.
You’ll be able to learn all about this new First Coast Re IV Ltd. (Series 2025-1) disaster bond, in addition to particulars on over 1,000 different cat bond transactions within the intensive Artemis Deal Directory.
