Crédit Agricole’s Pacifica gets €160m of reinsurance from debut Taranis Re cat bond

We’ve learned that the debut Taranis Reinsurance DAC 2023 catastrophe bond issuance for Crédit Agricole subsidiary insurer Pacifica, has now been priced and the transaction will secure the company €160 million of collateralized European focused catastrophe reinsurance.

This Taranis Re DAC 2023 cat bond issuance came to market early in November, with Credit Agricole’s subsidiary Pacifica seeking a €150 million or greater source of reinsurance across a four year term, to protect it against losses from windstorms and hail storm events affecting France, Monaco and Andorra.

As we then reported earlier this week, the target size was raised with up to €180 million of reinsurance sought from the deal, while at the same time the price guidance was raised in response to investor demand.

Now, we’ve learned that the final size of the Taranis Re DAC 2023-1 catastrophe bond will be €160 million for Pacifica, with the reinsurance from the notes set to run until the end of 2027, one tranche providing per-occurrence catastrophe reinsurance protection and the second providing annual aggregate reinsurance.

So that is above the initially targeted size for the deal, but below the top-end target that guidance had been updated with.

The Class A tranche of Taranis Re DAC 2023 cat bond notes that will cover Pacifica against losses from windstorms and hailstorms across the covered area on a per-occurrence basis, were initially €100 million in size, then pitched at up to €120 million, but we’re told will settle at €110 million.

These Class A occurrence notes have an initial expected loss of 3.53% and were first offered to cat bond investors with spread price guidance in a range from 7% to 7.5%, and we now understand that their pricing was eventually finalised at the raised and fixed end of guidance at 8.25%.

The Class B tranche were originally targeted to provide €50 million of solely windstorm cover, but on an annual aggregate and second event basis. The target size was then increased to up to €60 million, but we’re now told the notes priced to provide the original €50 million of reinsurance.

The Class B cat bond notes from Taranis Re DAC, with their initial expected loss of 1.5%, were first offered to cat bond investors with spread price guidance in a range from 5% to 5.75%, but have now been priced at the raised and fixed guidance level of 6%, we understand.

While Pacifica did not upsize its debut cat bond as much as it had perhaps hoped to, the slight upsizing even at higher pricing demonstrates that the catastrophe bond market is providing comparable property catastrophe reinsurance pricing to the traditional market in Europe.

While the price signals this and other European peril cat bonds have been sending, should assist in giving some indication as to where European property catastrophe reinsurance renewals will price at January 1st 2024.

View details on the new Taranis Reinsurance DAC 2023  catastrophe bond and you can read all about this and more than 950 other cat bond transactions in the Artemis Deal Directory.