Brit secures $100m Lapis 2025-1 catastrophe bond at reduced pricing

Brit Limited, the specialty insurance and reinsurance player and part of the Fairfax group, has now secured its targeted $100 million in multi-peril North American catastrophe reinsurance protection from the new Lapis Series 2025-1 catastrophe bond issuance, with the notes priced at the bottom of reduced guidance.

Brit ventured back to the catastrophe bond market for the first time since 2020 earlier this month, targeting $100 million or more in multi-peril North American catastrophe reinsurance protection from this Lapis 2025-1 cat bond arrangement.

The company last sponsored a cat bond back in 2020, when it secured $300 million of multi-peril collateralized US catastrophe retrocessional reinsurance from the capital markets using its own UK domiciled protected cell company, Sussex Capital UK PCC Limited as the issuer.

Brit is again utilising a UK domiciled special purpose reinsurance vehicle for its latest cat bond issuance, the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited.

As we reported in our first update on this deal, the target size remained unchanged, with London Bridge 2 PCC still set to issue $100 million of Lapis 2025-1 notes to cat bond investors, however, the price guidance for the notes had fallen, as Brit looked to capitalise on the attractive execution being seen across the catastrophe bond market, especially for industry-loss based deals which remain in high-demand.

Now, sources have told us that the targeted $100 million in multi-peril North American catastrophe reinsurance protection has been secured, with the notes pricing at the bottom of reduced guidance.

The now finalised $100 million Lapis Series 2025-1 cat bond notes will provide Brit Re and Brit’s Syndicate 2987 ceding entities with weighted industry-loss trigger based annual aggregate catastrophe reinsurance protection covering US named storms including DC, Puerto Rico and the US Virgin Islands, as well as earthquakes in the US, those same additional territories and Canada from April 1st through until the end of 2028, so providing four hurricane seasons of coverage and three years eight months of earthquake protection.

The Lapis Series 2025-1 cat bond notes that London Bridge 2 PCC will issue come with an initial expected loss of 3.58% and were initially offered to cat bond investors with spread price guidance in a range from 7.75% to 8.5%.

That price guidance was updated at a lower level, with a spread of between 7.5% to 7.75% then being offered to investors, and we’re now told the pricing has been finalised at the low-end for a spread of 7.5%, so below the initial range.

Brit has benefited from the strong price execution in the catastrophe bond market to secure a meaningful $100 million of multi-peril North American catastrophe reinsurance protection at attractive pricing, while locking that in for a multi-year period, all thanks to the appetite of cat bond investors.

As a reminder, you can read all about this London Bridge 2 PCC Limited (Lapis 2025-1) catastrophe bond transaction in our Deal Directory, where you can analyse details of almost every cat bond ever issued.