Allstate aims to double new Sanders Re cat bond to $400m in size
US primary insurer Allstate has for a second time raised the target size for its latest catastrophe bond, now aiming to double the Sanders Re III Ltd. (Series 2024-1) issuance from the initial $200 million goal, to source $400 million in reinsurance from the capital markets with this deal.
Allstate has seemingly experienced strong investor demand for its latest catastrophe bond issuance, which is its eighteenth catastrophe bond issuance, with the deal now upsizing twice and the notes still looking likely to price at the bottom-end of initial guidance.
Allstate returned to the cat bond market in December to use its Sanders Re III Ltd. vehicle for issuance of a single tranche of Series 2024-1 cat bond notes, targeted to provide at least $200 million in fully-collateralized reinsurance.
As we were first to report yesterday, the target size of this issuance was increased considerably, with Allstate aiming to secure between $300 million and $350 million of reinsurance from this Sanders Re III 2024-1 cat bond issuance.
Now, we’re told the size target has been raised further, to make this a $400 million issuance of notes for Allstate.
It’s important to note this Sanders Re III 2024-1 cat bond is still in the offering stages of its life, so things could change. But we understand the $400 million target is deemed achievable and the price guidance, while lowered, is anticipated to stick where it now is.
The reinsurance from the new cat bond will cover Allstate for certain personal lines property and auto losses from multiple US perils, on a per-occurrence and indemnity trigger basis over a more than four year term, from the date of issuance running to maturity at the end of March 2028.
We’re now told the $400 million of Sanders Re III 2024-1 Class A cat bond notes that are being offered, with their initial expected loss being 0.8884%, are still proposed to pay investors a spread of 5.75%, which is the bottom of the originally marketed 5.75% to 6.5% range.
As we said yesterday, the multiple of expected loss at issuance will still be above the current averages for the marketplace, at this pricing level, which might help explain the strong investor demand for the notes.
You can read all about this Sanders Re III Ltd. (Series 2024-1) from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.
