Ariel Re brings back Titania Re 2024-1 catastrophe bond with $175m target

Global reinsurance firm Ariel Re has returned to the catastrophe bond market looking to secure $175 million or more in multi-peril industry-loss triggered retrocession through the Titania Re Ltd. (Series 2024-1) transaction, a deal that had initially been mooted earlier in the year.

As we reported back in May, Ariel Re opted to pull the catastrophe bond issuance at that time as a response to the dynamic and higher cat bond market pricing environment, so the Titania Re Ltd. (Series 2024-1) transaction was not issued back then.

Now, the reinsurer is back and while the transaction has some changes, in terms of risk levels on offer, the overall mission continues to be to expand Ariel Re’s capital markets backed sources of retrocessional catastrophe reinsurance protection.

Once this new deal is issued it will be Ariel Re’s fourth in the Titania Re series and sees the company again using its Lloyd’s Syndicate 1910 as the ceding company, which is its main underwriting vehicle for its global reinsurance business.

Ariel Re is once again seeking coverage for the same peak perils of named storm and earthquake risk across the US, Canada and related territories.

Bermuda domiciled special purpose insurer (SPI) Titania Re Ltd. is targeting issuance of two tranches of Series 2024-1 notes, which will be sold to investors and the proceeds used to collateralize a multi-year source of retro reinsurance for Ariel Re, covering certain losses from U.S. 50 state, Puerto Rico, U.S. Virgin Islands, D.C. and Canada named storms and earthquakes.

Both tranches of Titania Re 2024-1 notes will provide Ariel Re with annual aggregate and industry loss triggered retro protection, over a three year term to November 27th 2027, we understand from sources.

The target size across the two tranches is for $175 million of retrocessional protection to be secured.

Titania Re Ltd. is looking to issue a $100 million or larger Class A tranche of Series 2024-1 notes that will have an initial attachment point at $3.065 billion of losses, with exhaustion set at $4.29 billion and a $166.5 million franchise deductible to be taken into account before losses can aggregate against them.

The Class A notes come with an initial attachment probability of 3.3%, an initial base expected loss of 2.47% and they are being offered to cat bond investors with price guidance in a range from 7.25% to 8%.

A targeted $75 million Class B tranche of notes are riskier, attaching at $2.55 billion of losses and covering a share up to the $3.07 billion level, this time with a $165.5 million franchise deductible enforced, we are told

The Class B tranche of notes come with an initial attachment probability of 4.71%, an initial base expected loss of 4.02% and they are being offered to cat bond investors with price guidance in a range from 10.5% to 11.25%.

As said, the risk metrics are a little different to the earlier issuance from May that did not get completed, which shows Ariel Re seeking to optimise its coverage for how its portfolio has developed since that date, we suspect.

It’s very encouraging to learn that Ariel Re has returned with this issuance and is looking to expand on its catastrophe bond coverage in 2024. The firms’ $150 million Titania Re 2021-1 matured earlier this year before wind season began, so the successful completion of this new issuance will help Ariel Re secure more protection for the coming years.

Ariel Re also has $175 million of retro cover with a similar Titania Re Ltd. (Series 2021-2) issuance from December 2021 that matures before the end of this year, as well as a $115 million Titania Re Ltd. (Series 2023-1) cat bond that runs its coverage into Q1 of 2026.

You can read all about this new Titania Re Ltd. (Series 2024-1) catastrophe bond from Ariel Re, as well as details on over 1,000 other cat bond transactions in the extensive Artemis Deal Directory.