Florida Peninsula aims to lower pricing further for $150m Palm Re cat bond

Florida Peninsula Insurance Company has for a second time lowered the price guidance for its new $150 million debut named storm reinsurance catastrophe bond deal, Palm Re Ltd. (Series 2024-1).

Florida Peninsula Insurance Company entered the catastrophe bond market for its debut issuance just over a fortnight ago, as we reported.

The initial target had been to secure just $100 million of named storm reinsurance from the first Palm Re cat bond deal, but as we then also wrote the target was lifted with up to $150 million of coverage then being sought and at the same time the price guidance was lowered.

Now, we understand from sources that the target size has been fixed at that 50% upsized level of $150 million, while the price guidance has been reduced further still.

The reinsurance protection from this Palm Re cat bond will provide Florida Peninsula and subsidiary Edison Insurance with $150 million of cover for named storm losses in the state of Florida, on a per-occurrence and indemnity trigger basis across a three-year term, from June 1st 2024, through May 31st 2027.

The now set to be $150 million of Palm Re Series 2024-1 Class A cat bond notes come with an initial base expected loss of 1.78% and were first offered to investors with spread price guidance in a range from 10.25% to 11%.

As we then reported, that price guidance had been lowered to an updated range of 9.75% to 10.25%.

We’re now told the price guidance has dropped further, with the notes now offered to investors with a new price range of 9.5% to 9.75%.

Which suggests that Florida Peninsula’s debut cat bond deal will come in upsized by 50%, priced at least 8% below the mid-point of initial spread guidance.

You can read all about this new Palm Re Ltd. (Series 2024-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.