SURE & Elevate reduce pricing for $130m Gateway Re 2024-2 second event cat bond

We’re told that the price guidance has been reduced for SageSure linked SureChoice and Elevate reciprocal exchanges’ new $130 million second and subsequent event  Gateway Re Ltd. (Series 2024-2) catastrophe bond issuance.

The pair returned earlier this month, seeking up to $130 million of named storm reinsurance protection on a second and subsequent event basis from the capital markets.

We’re now told that this new Gateway Re 2024-2 cat bond looks set to achieve the upper-end of that target, for $130 million of protection.

But, like so many other recent cat bonds, the price guidance has been reduced as the sponsors target better than expected price execution from the deal.

Gateway Re Ltd. was originally aiming to issue a single Class C tranche of Series 2024-2 cat bond notes, sized between $100 million and $130 million.

We’re now told that the latest marketing information shows the Class C Series 2024-2 notes that Gateway Re Ltd. will issue are sized at $130 million, so the upper-end.

They are set to cover the reciprocals against losses from named storms affecting the US states of Alabama, Florida, North and South Carolina, Louisiana, Mississippi, and Texas, on an indemnity, per-occurrence basis, for second and subsequent event losses.

The notes will only provide their protection across a single hurricane season, coming on-risk after issuance in April and running until December 15th.

The now set to be $130 million of Class C 2024-2 notes have an initial expected loss of 1.23% and were initially offered with price guidance of 90.5% to 91.5% of par, so are being structured as zero-coupon notes, so a rough spread equivalent of 8.5% to 9.5%.

We’re now told by sources that the price guidance has been updated to between 91.5% and 92% of par, which indicates a reduction to a rough spread equivalent of 8% to 8.5%.

So, it looks like SageSure’s underwriting entities are getting set for another good result in the catastrophe bond market, to follow on from their just secured $250 million multi-year and first-event Gateway Re Ltd. (Series 2024-1) issuance.

You can read all about this new Gateway Re Ltd. (Series 2024-2) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.