Ariel Re secures Titania Re 2024-1 cat bond 86% upsized to $325m, at reduced pricing

Ariel Re has now finalised its new Titania Re Ltd. (Series 2024-1) catastrophe bond transaction, securing the 86% upsized target of $325 million in multi-peril industry-loss triggered retrocessional reinsurance, while the notes have been priced a full percentage point below the low-end of the initial guidance range.

Ariel Re’s latest venture to the catastrophe bond market has clearly reflected the very strong investor appetites being seen at this time, resulting in very strong execution of the placement for the reinsurance company.

Ariel Re returned to the catastrophe bond market at the end of October, with an initial target to secure $175 million in multi-peril industry-loss triggered retrocession through this new cat bond deal

We subsequently reported that the offering size was increased to $275 million of notes, a roughly 57% increase.

We then reported that the offering size had been raised again, with between that $275 million and $325 million of retro reinsurance being sought by Ariel Re from its latest cat bond issuance.

Now, sources have told us that Ariel Re has secured that upper-target, with this Titania Re 2024-1 cat bond set to complete at $325 million in size, an 86% increase from the initial target.

At the same time, the two tranches of notes have each been priced with a spread a full percentage point below the bottom-end of their initial guidance ranges, further underscoring cat bond investor appetites at this time.

What was initially offered as a $100 million Class A tranche of Series 2024-1 notes were then offered at $150 million in size in the first update, then at between that level and $175 million, but now have been finalised at the top-end of $175 million, we are told.

The Class A notes have an initial base expected loss of 2.47% and were first offered to cat bond investors with price guidance in a range from 7.25% to 8%, which was was then reduced to between 6.5% and 7.25% before being lowered again to between 6% and 6.5%. We are now told the Class A notes priced for a spread of 6.25% to be paid to investors.

What was initially targeted as a $75 million Class B tranche of notes were then offered at $125 million in size after the first update, after which the size guidance was lifted to between $125 million and $150 million, but now have been finalised at the top-end as well, at $150 million, sources said.

The Class B tranche of notes have an initial base expected loss of 4.02% and were first offered to cat bond investors with price guidance in a range from 10.5% to 11.25%, which was later reduced to a range of 9.75% to 10.5%, then reduced further to between 9.25% and 9.75%. At pricing, we’re now told the spread was finalised at 9.5%.

Which means the Class A notes pricing fell approximately 18% from the initial guidance mid-point, while the Class B notes pricing fell approximately 13%, which alongside the upsizing represents a very strong result for Ariel Re on all fronts.

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.