Tower Hill Insurance Exchange, a Florida homeowners and commercial property insurance underwriter, has returned to the catastrophe bond market for its second time, seeking $100 million or more in Florida named storm reinsurance from this Winston Re Ltd. (Series 2025-1) issuance.
A year ago, Tower Hill Insurance Exchange secured $400 million of reinsurance from its debut Winston Re 2024-1 catastrophe bond, with that transaction doubling in size while marketing thanks to strong investor demand.
For 2025, Tower Hill is looking to build-out more capital markets backed reinsurance protection within its core Florida-focused tower.
For its second cat bond, Tower Hill is again using its Bermuda based special purpose insurance company named Winston Re Ltd.
Winston Re Ltd. will issue a single tranche of Series 2025-1 Class A notes that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the SPI and Tower Hill.
Similar to its debut cat bond, we’re told by sources that this Winston Re 2025-1 issuance will provide Tower Hill with reinsurance protection against named storm losses in Florida.
The protection will be structured on an indemnity trigger and per-occurrence basis, running across a three hurricane season term, beginning June 2025 and with maturity due in February 2028.
With an initial target for $100 million of protection from its second cat bond, it will be interesting to see if Tower Hill again looks to maximise this opportunity by upsizing this issuance.
The $100 million tranche of Series 2025-1 Class A notes Winston Re is offering will provide Tower Hill with reinsurance protection from an initial attachment point of $925 million to exhaustion at $1.125 billion of losses, we are told.
That gives the notes an initial attachment probability of 1.55%, an initial base expected loss of 1.42% and these notes are being offered to investors with spread guidance in a range from 7% to 7.5%.
We can compare these 2025-1 notes to those from the prior year issuance, when the 2024-1 Class A tranche had an initial expected loss of 1.56% and priced for a spread of 10.25% and the riskier 2024-1 Class B notes had an expected loss of 1.97% and priced to pay investors a spread of 11.75%.
So clearly the pricing appears lower this time around, which is unsurprising given the lower spreads of issuance seen through the fourth-quarter of last year and into January.
As such, it will be interesting to see where this new cat bond for Tower Hill settles, in pricing terms.
You can read all about this Winston Re Ltd. (Series 2025-1) in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.
