American Integrity’s target for latest cat bond grows again to $305m

We’re told that American Integrity Insurance Company has for the second time lifted the target size for its new catastrophe bond, with now $305 million in collateralized named storm reinsurance protection sought from the Integrity Re Ltd. (Series 2024-1) issuance, which would be a more than doubling of the size of this deal since its launch to investors.

American Integrity returned to the catastrophe bond market earlier this month, with an initial target to secure at least $150 million in collateralized named storm reinsurance protection for its exposures across three southeast US states.

As we then reported this morning, the target size of this issuance was raised to at least $295 million, while the price guidance was lowered across all tranches of the cat bond deal.

Now, our sources have told us that the target size has been increased further, with now $305 million of named storm reinsurance being sought by American Integrity.

Full details of this and every cat bond sponsored by American Integrity can be found in our Deal Directory.

When the deal was first being marketed to investors, American Integrity was seeking $150 million or more in indemnity based named storm reinsurance across the covered states of Florida, Georgia and South Carolina, across two risk periods, coming on risk from June 2024, with the coverage running to the end of May 2026.

Four tranches of notes are to be issued, the first of which will provide annual aggregate reinsurance and the next three will provide per-occurrence reinsurance that would cascade down after events erode lower layers of the insurers’ reinsurance tower, such as its FHCF coverage.

The aggregate layer of notes from this cat bond deal were originally a $50 million tranche of Class A notes, which we later learned had been upsized to $120 million, to cover the full layer of the aggregate risk tower.

The $120 million of Class A notes have an initial expected loss of 0.22% and were first marketed with spread guidance in a range from 12% to 13%, which was later reduced to between 11% and 12%, but we’re now told has been lowered again and narrowed to between 10.5% and 11%.

The Class B tranche of notes are still positioned at $50 million in size and will provide per-occurrence protection, with an initial expected loss of 2.35%. These notes were first offered with spread guidance in a range from 14% to 15%, which was then reduced to 13.5% to 14% and we’re now told has been reduced again to 13.25% to 13.5%.

The Class C tranche of notes are now targeted to be $60 million in size, we are told. These also provide per-occurrence protection, with an initial expected loss of 2.38% and continue to be offered with spread pricing of 17%.

The final tranche of Class D notes were originally positioned to be $50 million in size, but are now targeted at the raised $75 million target. They have an initial expected loss of 3.56% and were first offered with spread guidance in a range from 22% to 23%, which was later narrowed to a new range of 22.5% to 23% and we’re now told has been fixed at the 23% upper-end of intiial guidance.

The transaction is now looking set to upsize by more than 100%, while the pricing has moved down further on some layers, aside from the riskiest Class D notes, reflecting cat bond investor’s having stronger appetite for risk from higher layers of reinsurance towers.

You can read all about this new Integrity Re Ltd. (Series 2024-1) catastrophe bond and every cat bond deal in the Artemis Deal Directory.