Beazley lifts target for PoleStar Re cyber cat bond to $140m

Beazley has for a second time increased the target size of its debut 144A cyber catastrophe bond issuance, with the PoleStar Re Ltd. (Series 2024-1) deal now aimed to secure $140 million of cyber reinsurance for the company.

Beazley, the London headquartered specialty insurance and reinsurance underwriter, had started marketing its debut cyber cat bond, the PoleStar Re deal, at $75 million of notes in size.

As we then reported last week, we were told that Beazley had updated the size to become a $130 million offering, a 73% increase, while the pricing was lifted to the top-end of guidance.

Now, we’ve been told that Beazley’s size ambitions for coverage from this catastrophe bond have been increased again, with the PoleStar Re cyber cat bond offered at a suggested $140 million in size, which would represent an 87% upsizing if achieved.

As we said before, this is encouraging as it suggests Beazley sees the pricing as still-conducive to secure more cyber reinsurance from the capital markets, even though the spread guidance was raised to the top-end of the initial range offered.

It also shows that cat bond investors have responded very positively to Beazley’s need for cyber protection, sending a strong signal to other potential cyber cat bond sponsors.

This PoleStar Re cyber cat bond issuance is designed to secure Beazley a broad source reinsurance coverage from the capital markets against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

The cyber reinsurance coverage is structured on an indemnity trigger and per-occurrence basis, to run across a two year term through calendar year’s 2024 and 2025.

The now targeted $140 million of cover would attach from $500 million of losses to Beazley after a cyber event, covering a share of losses to $800 million.

The $140 million of PoleStar Re cyber cat bond notes on offer have an initial expected loss of 1.26%.

They were first marketed to cat bond funds and investors with spread price guidance in a range from 12% to 13%, which was later raised to the top-end of 13% and we understand that is where it stays, with pricing scheduled later today, we are told.

We will update you as to how this debut 144A cyber catastrophe bond issuance executes for Beazley.

You can read all about this PoleStar Re Ltd. (Series 2024-1)  catastrophe bond transaction to our Deal Directory, where you can analyse details of almost every cat bond ever issued.