Great American Insurance Group is now targeting between $300 million and $350 million in multi-peril collateralized reinsurance through its Riverfront Re Ltd. (Series 2025-1) transaction, so likely to be its largest catastrophe bond issuance yet, while price spread guidance has been updated for the tranches of notes, Artemis has learned.
Great American Insurance Group returned to the cat bond market in late March with its fourth transaction and first since 2021, seeking at the time $225 million or more in multi-year and multi-peril collateralized reinsurance protection from the capital markets.
The $225 million was comprised of an at least $150 million Class A tranche of Series 2025-1 notes, and a $75 million Class B tranche of Series 2025-1 notes.
Sources have confirmed to Artemis that Great American Insurance Group has increased the target size for both tranches of notes.
The size range for the Class A tranche of Series 2025-1 notes is now $200 million to $225 million, so a 50% increase at the top-end of the new range. The size range for the Class B tranche of Series 2025-1 notes is now $100 million to $125 million, so a roughly 67% increase in size at the top-end of the updated range.
So, the insurer is now looking to secure as much as $350 million in multi-peril reinsurance with its fourth cat bond, which would be its largest ever, above the $305 million Riverfront Re Ltd. (Series 2021-1) transaction.
The reinsurance protection from the Riverfront Re 2025-1 cat bond notes will cover the company’s commercial property book, including certain risks from its National Interstate Insurance and Mid-Continent Casualty insurers, on a per-occurrence and indemnity trigger basis from both tranches.
Artemis understands that the covered perils are the same as the two previous Riverfront Re cat bonds, being U.S., DC and Canada named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impact, and volcanic eruption.
The Class A notes come with an initial attachment probability of 0.97%, an initial expected loss of 0.56% and were initially being offered to cat bond investors with price guidance of 4.75% to 5.75%.
We’re now told that for the up to $225 million of Class A notes spread price guidance has been updated to 5.5%, which is roughly 5% above the mid-point of initial guidance.
The up to $125 million Class B notes, which are the riskier of the two, have an initial attachment probability of 2.3%, an initial expected loss of 1.54% and were initially being offered to investors with a price guidance range of 7.5% to 8.5%.
Sources have told Artemis that for the Class B notes spread price guidance has been updated to 7.75%, which is roughly 3% below the mid-point of initial guidance.
You can read all about this new Riverfront Re Ltd. (Series 2025-1) catastrophe bond and hundreds of other cat bonds in the extensive Artemis Deal Directory.