Florida Peninsula seeks debut cat bond, with $100m Palm Re issuance

Yet another first time catastrophe bond sponsor has come to market with its debut issuance, as Florida Peninsula Insurance Company seeks $100 million or more in named storm reinsurance from this Palm Re Ltd. (Series 2024-1) cat bond deal, Artemis can report.

Florida Peninsula Insurance Company is a specialist in the state, writing business on its own balance-sheet and also its subsidiary Edison Insurance Company.

We understand this debut cat bond from Florida Peninsula will provide reinsurance protection to both entities.

Palm Re Ltd. has been established in Bermuda, to issue series of catastrophe bond notes to benefit Florida Peninsula Insurance and subsidiaries.

For this first issuance, Palm Re Ltd. will seek to issue $100 million or more in Series 2024-1 Class A notes, that will be sold to investors and the proceeds of that used to fully-collateralize a reinsurance agreement with the sponsor.

The reinsurance protection will cover Florida Peninsula and Edison Insurance against named storm losses in the state of Florida, on a per-occurrence and indemnity trigger basis.

That coverage will run across a three-year term, from June 1st 2024, through May 31st 2027, we understand.

The $100 million of Palm Re Series 2024-1 Class A cat bond notes would attach their coverage at $570 million of losses and protect a share of losses up to exhaustion at $870 million, we are told.

That gives the notes an initial attachment probability of 2.5%, an initial base expected loss of 1.78% and the cat bond notes are being offered to investors with spread price guidance in a range from 10.25% to 11%, sources explained.

Florida Peninsula is the seventh first-time catastrophe bond sponsor to come to market in 2024 already, with this supply of new sponsors set to help the market continue on its expansion path.

For every new sponsor, at least some of them become repeat sponsors that embed cat bonds within their reinsurance towers over the longer-term, so the faster new sponsors try out the cat bond market for the first time, the better it bodes for future issuance and cat bond market growth.

You can read all about this new Palm Re Ltd. (Series 2024-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.