Conduit Re targets lower pricing for first Stabilitas retro cat bond

Conduit Re, the Bermuda headquartered global reinsurance company that launched for the 2021 underwriting year, is targeting lower pricing for its first and still $100 million Stabilitas Re Ltd. (Series 2023-1) catastrophe bond, that seeks to secure retrocession from the capital markets for the company.

As we were first to report just over a fortnight ago, Conduit Re had entered the catastrophe bond market with a debut issuance, as it looks to bring the capital markets into its retrocessional reinsurance arrangements on a fully-securitized basis.

Conduit Re had established Stabilitas Re Ltd. in Bermuda, with the first $100 million issuance targeting a source of both US named storm and US earthquake retrocessional reinsurance protection for the company.

The Series 2023-1 Class A notes that Stabilitas Re will issue for Conduit Re are set to provide the reinsurer retro protection on an industry loss trigger and annual aggregate basis, across a roughly three-year term to the end of May 2026.

The $100 million of notes have an initial base expected loss of 2.7% and were at first offered to cat bond investors with price guidance of between 9% and 9.75%.

We’re now told that, while there hasn’t been any update to the size of this first Stabilitas Re catastrophe bond transaction, remaining at $100 million, the target for the pricing has been lowered, with an updated spread guidance of between 8.5% and 9% now offered to investors.

Suggesting Conduit Re is currently prioritising pricing, over size, of its debut catastrophe bond.

You can read all about Conduit Re’s first Stabilitas Re Ltd. (Series 2023-1) catastrophe bond and every transaction issued since 1996 in the Artemis Deal Directory.